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Again, Recession Mongers are Disappointed; More Odds & Ends

The recession folks just really want to have one.

By Dr. Joe Webb
Published: April 17, 2008

The recession folks just really want to have one. They'll get it, but it will be by sheer force of intimidation of the economists who do that kind of thing. Today's initial claims data really didn't do anything: the four week average basically stayed the same.
Some of the talking heads on CNBC said everyone was watching the continuing claims. That is, the number of workers getting unemployment checks regularly. I checked. Sure, the number is going up. But the ratio to the employed workforce is less than 2%. The average going back to 1967 is 2.35%. The worst ratio since that time was 5.39% in April 1975, and the lowest was 1.27% in June of 1969.
In another report today, the economy was not cooperating at all. The Leading Economic Indicators went up. Sure it was just a smidgen 0.1% points, but it stopped five months of declines.
The economy is resilient, especially with a 15% capital gains tax rate (safe for almost two years) and the ballooning money supply. The inflation numbers were bad, as they were expected to be. We're now at 4% on a year-year basis on the CPI and almost at 7% on the PPI.
In a recent column where I discussed the ISM Manufacturing Index, I left out that “printing and related support activities” was also listed in the ISM's growing industries. It was good to see our industry there, of course. I had pulled it out of their list intending to comment on it separately, and obviously failed to do so! Remember, many print businesses are doing well, gathering sales from defunct or troubled competitors, and focusing on growth segments such as direct marketing. Remember, industry shipments may be declining, but companies can grow. This is always a reminder that the best forecasts are those that are top-down (entire industry to individual companies) and bottom-up (companies to entire industries) which is the only way to detect and understand these seemingly conflicting trends. (Hat tip to Gary Ampulski and Cary Sherburne who actually followed the links in the column to the ISM release, and  sent me notes reminding me, kindly, of the oversight).
The New York Times Company and Media General had very bad financial reports, blaming a rather sour ad market. Newspapers are the longest slow motion view of a car wreck that everyone has seen coming, yet they keep acting surprised. Usually there's someone anxious to say "the worst is over" and it's comforting to see the lack of those words in articles now. The Wall Street Journal article said "In response to worsening business conditions, newspaper companies have been shedding jobs, cutting other costs and showering attention on online operations. None of it has been enough to rescue the industry." As best as I can tell non-dailies are still doing well, under the radar of the business press.

Dr. Joe Webb is one of the graphic arts industry's best-known consultants, forecasters, and commentators. He is the director of WhatTheyThink.com's Economics and Research Center.

What do you think? Please send feedback to Dr. Joe by emailing him at drjoe@whattheythink.com.

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