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Here is the Fed Open Market Committee’s announcement of November 25, 2008 announcing the implementation of QE1, a $600 billion bond purchase program: This action is being taken to reduce the cost and increase the availability of credit for the purchase of houses, which in turn should support housing markets and foster improved conditions in financial [...] In their first estimate of the second quarter 2012 GDP, the Bureau of Economic Analysis (BEA) found that the annualized rate of U.S. domestic economic growth was 1.54%, down nearly a half percent from the (revised) 1.97% for the prior quarter and down over two and a half percent from the (revised) 4.10% growth rate [...] The two most interesting words coming from the media about the drop in retail sales were, “unexpected” and “unexpected.” Today’s Census Bureau report said that retail sales were down 0.5% in June, and even ex-autos, was down 0.4%. Why this should be “unexpected” reveals more about contemporary economics than anything else. After all, economists are [...] Recent economic data, and especially today’s unemployment numbers reveal the powerlessness of the Fed in the face of underlying economic problems that they fail to understand. The Fed has tried every trick in the book for the past 4 years to revive the economy only to see it continue to weaken. Unfortunately they only know [...] With today’s weak employment numbers, most economists are looking for reasons to excuse this negative trend rather than trying understand it. They blame it on the warm winter weather, or “same thing as last Spring,” or “consolidation”, anything but what is really happening in the economy. You need to look at employment in the context of [...] Today’s economic reports continue to point to weakness rather than growth. This is something we have been forecasting for some time. We had forecast at best stagnation for the second half of 2012, and, at worse, a “double-dip.” It reinforces my belief that it will put the Fed into a corner and cause them to unleash [...] Unemployment rates remain high as job growth sagged and the so-called “improving” data has more to do with a shrinking pool of job seekers than job growth. Consumer credit also sagged with two months of contractions, especially in credit card debt. The Empire State manufacturing report was down, reflecting higher inventories and flattened new orders. [...] The OECD just came out with its “Interim Assessment” of the major economies within the OECD (34 countries). This article amounts to what is known on the blogosphere as “chart porn” since most of the data comes in the form of … charts. Personally I think “chartocopia” is a better term. Whatever. I am going [...] The Richmond Fed manufacturing report continued negative: Manufacturing is contracting for the fourth month in a row in the Richmond Fed district where the index is unchanged at minus six. New orders, at minus five, are also in the negative column for the fourth straight month with backlog orders, at minus 15, down for a sixth straight [...] Last week the markets reacted very strongly to the retail services report from the Census Bureau that said they went up 1.1%. The only problem with that conclusion is that they didn’t go up. The U.S. Census Bureau announced today that advance estimates of U.S. retail and food services sales for September, adjusted for seasonal [...] The final calculation of Q2 GDP was +1.3%. The advance estimate was 1.3%, the second estimate was 1.0%, and the final is back to the original. The revisions had to do with the following: The increase in real GDP in the second quarter primarily reflected positive contributions from nonresidential fixed investment, personal consumption expenditures (PCE), [...] |
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