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January 17 2016 2016, Another 2015?

Workers began to see take home pay improvements late 2015, which should sustain their spending in 2016 but will it acceleatate GDP growth?

March 1 2015 New Jobs Improving But Average Hourly Earnings Growth Not Enough to Accelerate the Recovery in 2015

My fundamental equation is jobs created multiplied times average hourly earnings equals the most significant contribution to increase GDP growth through Personal Consumption Expenditures. With average hourly earnings NOT growing substantially in early 2015, the slows economic growth.

August 6 2014 New Jobs Improving But Average Hourly Earnings Not Enought to Accelerate the Recovery in 2014

To improve GDP growth increase the number of jobs, average hourly earnings or both. New long term jobs have a sustained impact, average hourly earnings increases much less so. Usually, growing average hourly earnings leads growing real PCE.

June 6 2014 UPDATE - Residential Construction Spending Indicates Improvement in the Economy in 2014 But Slowing Down

Construction spending and change from last year continue to support the economy will grow in 2014 but as new home inventory is growing and the large home builders permit growth tailing off.

February 2014 Will Residential Investment Improve Economic Growth? 2014 Looks Good

The assumption is residential building growth will return to a reasonable pace, borrowed money is cheap and thereby spur economic growth.

Steady As You Go, Slow, In 2014

Still steady as you go, slow, growth 65 months into the recovery.

PCE Trending Down as We Save Less and Are Not Getting Raises

As long as job growth and earnings growth are flat in 2014, economic growth will be anemic.

November 6, 2013 Government Investement Relative to GDP

It would be difficult to blame one party in 2013 for reduced government investment compared to GDP since since the early 1960s that investment has not kept up with GDP growth.

October 9, 2013 Five Core Arguments Driving Congressional Impasses

National Debt versus GDP growth normalize (wonkish) suggest political parties are arguing apples and oranges.

October 6, 2013 So What Are Our Congressmen Fighting About?

Are the arguments for debt versus total GDP being presented honestly.

September 25, 2013 What We Spend Compared to What We Earn (Wonkish) - Will Older Workers Come back?

A key driver of consumer demand, our confidence we can spend more, is recovering from the Great Recession and we are paid more -- pay cuts restored, new or better job, clients come back. A concern this time is a structural change in the labor market, older workers not finding jobs

March 16, 2013 Small Businesses Ready to Expand But Holding Back

NFIB March 2013 Report on Small Business Economic Conditions suggests small businesses ready to expand but holding back.

March 7, 2013 Inflation to Remain Tame - Pace of Recovery Might Pick Up Later This Year

Compared to other financial crises worldwide, the US is doing surprising well but from such a deep drop, there is still a long way to go as housing construction adds steam to the recovery. Pending Federal furloughs and layoffs may not slow us down.

March 3, 2013 Will Housing Accelerate the Recovery?

Bill McBride, CalculatedRisk, "pointed out there are usually two bottoms for housing: the first for new home sales, housing starts and residential investment, and the second bottom is for house prices."

December 10, 2012 Opportunity in Second Half of 2013 into 2014 Local and State Governments Will Start Buying

The Congressional Budget Office (CBO) released its report on why the recovery is sluggish. From that analysis we can predict opportunities starting in 2013 and more in 2014, selling to local and state governments as their hiring patterns return to historical trends.

October 25, 2012 Pace of a Recovery - How We Measure Matters (Effort or How Long)

Reinhart and Rogoff argue John Talyor's analysis of job growth (Reagan v Obama) misleading, "this time is not different."

October 20, 2012 Time to Recharge Your Thinking

It is time your follow reliable statistical analyses to anticipate effect on our economy on your business.

October 18, 2012 - What We Spend to What We Earn - Wonkish

Is a key driver of consumer demand, our confidence we can spend more, coming back because we are paid more? To make a judgment we examine the relationship between national measures of consumer pay and spending

Sep 9, 2012 - The Jobs Conundrum

Can government spur demand or at least, do no harm now? I don't expect after US election from the lame duck Congress, an elegant, consensus approach to avoid the Fiscal Cliff? Business leaders holding off now on new private hires anticipating more do nothing congressional politics.

February 24, 2012 - Buffett Not Optimistic on Housing Bounce Back

Last year, Buffett told us that “a housing recovery will probably begin within a year or so.” He admits that he was dead wrong.

Jan 30, 2012 - USA Making Progress on Deleveraging

The USA is making progress on deleveraging, reported in many economic media.

January 2012 - Even Paul Krugman Grudgingly Optimistic, But Don't Bet on Housing Prices Roaring Back

Since so many reputations were destroyed, so much wealth lost, it is inconceivable that United States policy makers or politicians will let housing prices accelerate too fast or let the credit markets over-extend.

Not only is it going the be a slow recovery, it is going to take a long time as I expect the politicians to be a bit gun shy. That is a good thing.

December 2011 - Forecast for 2012 - Still in Stormy Seas

The shadow home inventory, those foreclosed about the enter the market, will continue to be a drag on the US Economy through 2012 as we deleverage.

December 2011 - Mark Carney 2012 Observations - Trying Time Continue As We Deleverage

Advanced economies have steadily increased leverage for decades. That era is now decisively over. The direction may be clear, but the magnitude and abruptness of the process are not. It could be long and orderly or it could be sharp and chaotic.

November 2011 - Jobs Outlook to Mid-decade

The US economy ability to create jobs is declining in a long term cycle.

August 2011: Out with the Old, In With the New UPDATED ... how'd we do on the predictions

Through July, Rosenberg's and Carney's predictions.

January 2011: Out with the Old, In With the New

Predictions for 2011 from two savvy Canadians, Mark Carney, Governor of the Bank of Canada and David Rosenberg, Gluskin Sheff

November 2010: "Where'd You Go Joe Dimaggio ..."

In the USA, we believe the consumer is king! Our economic engine. What would happen if fewer folks made less money (as a percent of the population)... I wonder? Lean processes, activity based costing may in fact hurt growth.

October 2010: So You Want to Be A High Performance Firm, What Do You Do?

To create a high performance firm is a goal for many entrepreneurs and CEOs and is much discussed in the business press. Of course innovation and a customer focus lead the list of core competencies needed, but when I asked over 900 business leaders in seminars on strategic planning what they considered the attributes of a high performance firm, their opinions were more pragmatic and nearly universal.

September 2010: Business Cycles Are Independent of Politics and Party Majorities

Economic reforms promised to a political base take months to impact business, often with unexpected results or credit taken years later, but in the end only business competitiveness matters to create jobs.

Late August 2010: 2-10 spread not signaling a double dip, rather a holding pattern (a wonkish explanation) Chart updated

Historically, when 2 year US Security yields are greater than 10 year Security yields (2 year yield - 10 year yield > 0), a recession starts 10 months to 33 months later. The spread is not indicating that in August 2010. We're in a holding pattern with stagnant growth.

August 2010 Watch for Savings Rate to Drop Off - The Sign Consumers Are Spending Enough to Sustain the Recovery

Following a recession, consumers continue to increase their savings for some months to rebuild their buffer. Therefore the decision to build inventories anticipating the consumer is returning to the market quickly should be made carefully. The 1974-75 recession had many characteristics of the Great Recession, and it was a full 25 months from the point people began spending to when they had rebuilt their buffer and were confident they could spend on non-essentials.

July 2010 - Finding Growth Opportunities - Questions to Ask Your Employees

The time and energy spent understanding your customers' needs always lead to new products or services. The first step is to have your customers talk about their business economics, where they are their business cycle and what do they need to do to grow. Often these conversations between your employees and your customers are hidden from senior management. The day to day interactions, observations, and "sharing the pain" chatter pass unnoticed. Over the next 12 months business leaders must shift their focus from defending core to creating demand.

February 2010 - A Strategic Planner's Responsibility is to Anticipate Consumer Demand

A consensus emerging is in 2010 we will see a slow recovery, with a chance of a double dip. Company strategists, consultants and planning teams will be challenged to manage the pace of growth as they assess consumer spending patterns.

December 2009 - Use Scenario Planning to Adapt As We Emerge From This Recession

Scenario planning is an efficient, cost-effective method used to observe, understand and adapt to economic, social, technical and political developments that will impact your organization, community and region.

June 2009 - Housing Will Not Lead Us Out

Spending on our homes is a fundamental driver of the US economy. A "driver" is a trend in the community, that as it builds momentum, triggers economic growth and creates opportunities for your business and your family.

May 2009 - Green Shoots

The mid-March and April market rally suggests equity investors are anticipating the recovery. There has been good news. A text book recovery would see the stock markets react to the good news about 60% to 70% of the way through the recession as firms prepare for a rapid recovery. But, Warren Buffett and Charlie Munger disagree.

Late March 2009 - AIGs Bonuses

In my life experience , "a few bad apples spoil the barrel," and the ones with integrity trying to clean up the mess will be overwhelmed by reaction to the few who caused the mess. Cooler heads will suffer. My daughter summed it up: bummer.

March 2009 - Hints of the Dawn of a Recovery

The most important hints of the dawn of the recovery are in three areas: bank interest expense, reduced new housing start clearing inventory, consumer real discretionary income growing slowly.

November 2008 - The Damage Has Been Done

Recession creates the conditions for a recovery. Excesses are cleaned up: inventories reduced, debts paid off, bad debts written off, savings increase, assess values drop, making them more attractive, and then folks star buying again. Trying to grow fast would be a mistake!

October 2008 - Caution is the Word

The coming months are going to be very difficult for the leaders who are trying to reposition for the recovery. It's our nature to try to move early into growth strategies to beat competitors. That is the wrong approach!

 



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