Published February 19, 2018
The countdown for Dr. Joe’s departure continues with four months to go. Please, let’s hope his brief video stardom does not go to his head. That head of his may not fit through the doorway when it’s time for his exit. The stock market is up…and then it’s down…blame it on visibility. Small business optimism is booming, and maybe the economy will get the hint. The industry’s capital investment is changing, with the appetite for used equipment increasing. But wait…there’s more to this month’s Dr. Joe submission.
Published February 16, 2018
CPI-adjusted consumer durable goods manufacturing remains well below its pre-recession level—one of the reasons that GDP has been so lackluster.
Published February 9, 2018
The first report of fourth quarter GDP was a disappointing +2.6%. Sources such as the Atlanta Federal Reserve’s GDPNow and the New York Fed’s Nowcast were for a stronger reading. Inventories are a major factor in the volatility of GDP data, and excluding that data, the economy neared those estimates, producing a much better +3.2% rate compared to Q3.
Published February 2, 2018
The US Commerce Department has released data for November 2017, and this is the first look at the full year by making an estimate for December. Based on shipment and employment trends, it appears that 2017 came in at $76.3 in current dollars. That's a -6.4% decrease in current dollars compared to 2016, and a -8.4% decrease on an inflation-adjusted basis. The chart includes selected prior years starting at 1995. December data will be released at the beginning of February, and will be revised in March. In May, the Commerce Department will revise the last three years of data, plus minor revisions to the years prior to that.
Published January 29, 2018
Inflation distorts our interpretation of history and clouds business decisions. All dollars may look alike, but what a dollar bought in 1950 is a lot different than a dollar in 2017. Unfortunately, commercial printing prices have not kept up with inflation, but the costs of running a printing business usually have. This means that it's harder to keep earnings and payrolls up to this level. If past dollars had greater value, this chart can be used to adjust past financial statements to bring those data to current value. This is especially important in budgeting processes where looking for trends in prior years is one way of assessing performance and goals.
Published January 22, 2018
Dr. Joe has a special message: he was wrong 15 years ago, and it worked out fine. The economy is showing improvement, and some reluctant data series are starting to be break their recession levels. Government shutdown? That won't stop them from collecting taxes! Many of the economic indicators show a strong Q4-2017 GDP report is in the offing - but the shutdown may prevent that data release. Dr. Joe warns of a data issues ahead - if small business booms, it may not be recognized right away. But there's one difference in big and small that's showing up right now in printing profits data.
Published December 18, 2017
The fifteenth year of Dr. Joe at WhatTheyThink comes to a close, and he’s got a lot of topics (and some charts, of course) to get off his mind. Tax reform, recruitment, hours online, profits, consolidation...you name it, it’s probably mentioned in this year’s final column. Oh, and we forgot Bitcoin...that’s here too.
Published December 4, 2017
What’s more important than tax reform? A tenth anniversary! It’s been ten years since the recession started. What does one get as a gift? We’re told it’s tin or aluminum. Does that mean someone’s giving all of us litho plates? Tax reform is a much better gift for the celebration. The reform is flawed, but better than nothing. There are some signs that the economy is improving for real, and Dr. Joe has his unique twist to offer.
Published November 20, 2017
Look at the shiny object, and please don’t peek behind the curtain. It’s a data game that’s played by many, and it starts with a good headline, and sometimes includes a great chart. A rising stock market without increasing revenue? Declining e-book sales that conveniently ignore niches that are contrary? And then there’s one for the record: the LP record. A pretty chart makes that story convincing, but only if you forget history. Don’t fall into that vinyl LP trap: there’s a hole in the middle of it.
Fed Change Means Fed Same, Shipments Tumble, Economy Muddles, and Can I Interest You in the Best Leftovers Ever?
Published November 6, 2017
We have a new chair at the Fed who is likely to stay the course, no matter how damaging that is. This month’s shiny object is the unemployment rate; don’t look at how it got there. A kerfuffle and a scuffle, and it all happened because of used equipment, which means the once mighty aren’t any more. And printing shipments… can we talk about something else?
Published October 23, 2017
It’s an interesting time at the Fed, especially when Dr. Yellen’s turn is expiring and one of Dr. Joe’s favorite candidates is in the running. There’s a lot of claims about jobless claims, and the claims are not really what they’re claiming. Labels and wrappers? That’s a tiny niche market in the big printing industry. Now 1 in 8 commercial printing dollars are in that specialty.
Published October 9, 2017
The hurricanes affected not just the lives of the people who experienced them, but also affected basic economic data. And yes, you can be employed and unemployed at the same exact time, in the same exact government department. The data seem strange, but the long term trends stayed the same. That’s why we call them long term trends. And August’s printing shipments? Don’t ask! There’s a video from a distinguished leader that’s worth seeing… and worth pondering… about print as a medium and you as a business.
Published October 5, 2017
Inflation and population changes often distort the analysis of economic trends. This chart shows the changing nature of retail sales on a per capita (per person) and inflation-adjusted (using the Consumer Price Index) basis by the percentage change compared to the same period of the prior year.
Published September 25, 2017
There are many “common wisdom” assumptions in the industry. One that refuses to die relates to print volume being related to GDP. The data are very clear; it’s technology that plays a bigger factor than macroeconomics. The other is that the effects of digital media will come to an end or will slow down. That one is obviously false; Moore’s Law may not be what it used to be, but we see how technology gets faster, cheaper, and more convenient every day. Bad assumptions lead to bad strategy, lead to dismissing opportunities that should be pursued, and reduce the urgency to act. Don’t let that happen to you or your business.
Published September 12, 2017
Who didn’t envy or aspire to become a big, high profile printing business? The print business has been turned on its head, where small and medium businesses are outperforming their much bigger counterparts. The latter are still dealing with the relevance of legacy processes and assets while trying to bring new focus to rich digital media interactions to static formats like print. There’s no doubt: The Third Wave is being released at a pivotal moment. While the industry is churning, there are warning signs in the economy and for content creation markets. Dr. Joe is getting that 2008 feeling: he doesn’t like it.
Published September 11, 2017
The recovery indicators (when we started these we thought they’d be around for about a year or so) had four of its six factors turn negative, with one of those falling back to its recession level of December 2007. Yes, that’s when the recession started. That long ago.
Published September 5, 2017
We’re in another wave of media change, the first with the consumer Internet, the second with social media, tablets, and smartphones, and now a third with an infrastructure built for heavy volume and high speed. Through two waves, there were printers who got out ahead with savvy judgment that went against the common wisdom and blazed their own paths of market engagement and abandoned industry practice. This third wave is already more intense, as printing shipments in the last six months are down more than -7%. Success in this third wave demands a new philosophy, a different understanding of capital, and a new assessment of risk. Dr. Joe offers The Third Wave, a new book, that addresses these issues.
Published August 17, 2017
Dr. Joe recommended reading.
Published August 17, 2017
The Bureau of Economic Analysis released the Q2-2017 GDP data and revisions to historical data beginning with 2014. Back in mid-May, the Commerce Department updated historical commercial printing shipments (NAICS 323) as part of its manufacturing shipments revisions. This week’s chart shows an updated view of both data series in current dollars (sometimes called “nominal;” both terms mean that data are not adjusted for inflation). The red line is year-to-year growth rate in GDP, and the blue line is year-to-year change in quarterly shipments. Since around 1997 printing shipments have not met GDP growth except for a moment between 2010 and 2015. The most recent printing shipments trend at the right of the chart are remarkable for their direction. A discussion of the GDP revisions and the current status of printing shipments can be found in the column of August 7.
Published August 7, 2017
Revisions to GDP last month showed a slower economy in 2016 and a better one in 2014 and 2015. That’s fine – but we have to make decisions today, not three years ago. Do changes to economic data really matter? They do, but perhaps not the way you think. The stock market is up and setting records, so the economy must be great! A different metric says otherwise. Economic data: it’s a strange place. And commercial printing shipments? Pass the ibuprofen, please.
Published July 24, 2017
What’s new? You should say “print,” because so many of the media decision-makers have not had noteworthy experiences with the medium. Selling what you know can actually be dangerous, because you need to know what your client and prospect know, first. Only then can you have a chance at relevance. Print is actually a baby, and reference to its glorious past diminishes the many new offerings and tactics that can involve printed materials and specialties in meeting the challenges and objectives of communicators.
Published July 10, 2017
The economy is sluggish on the positive side, and it would be grand if commercial printing would be the same. Recent printing shipments trends are a concern as the industry continues to reshape itself in response to a dynamic communications marketplace that is seems to re-create itself daily. One Midwest printer lands a big contract for signage… but of the kind that a third wave of media change mandates.
Published July 6, 2017
The Fed has been so reticent about raising rates, and in the process, rates for the 10-year US Treasury actually were negative in February. No, that’s not market rates, that’s the 10-year rate less the year-to-year Consumer Price Index. Since that time, the rate calculated in this manner has moved up 80 basis points. The rate peaked in September 2015 and it’s been down since then. The Fed is having problems making the decision to raise rates, and often announced more rates in a future period but increasing rates at a slower pace. They have a target inflation rate of 2% (which means you lose about 25% of your savings over 10 years on a compounded basis). If you believe that the inflation rate is calculated in a manner that makes it seem lower than it actually is, then the Fed’s desire to see inflation at the 2% rate before they start pushing interest rates higher may be be difficult to reach or sustain. That means long term rates will stay artificially low (on purpose) for a longer period of time than most experts expect.
Published July 6, 2017
The Economist has published a fascinating book, Megatech, edited by Daniel Franklin. Mr. Franklin gathered some of the world’s leading technologists and thinkers to describe the technologies in the labs and the trends that are already in play as they lead to 2050.
Published June 26, 2017
Prices tell us a lot about how media is changing and what’s ahead. It’s funny – the categories that are growing the most are the ones where prices are dropping. That’s strange. But media preference surveys can be misleading because they can assure media producers of the love of the marketplace, and divert their strategic attention to competitors impinging on that affection. What does Mary Meeker know? A trade association executive says she’s biased. That’s okay. Dr. Joe has different data.