Published August 29, 2014
The Fed has been in unchartered territory with its post-2008 actions, and unwinding them may take a bit of creativity. One of their obstacles might be the rates of long term government bonds around the world. The chart below shows the yield of 10-year bonds earlier this week. The rate on US 10-year bonds is more than 4x Japan's and more than 2x Germany's. In an odd situation, US bonds are actually paying less than those of Spain. Global investors looking for yield (pension funds, governments, mutual funds, and others) may thwart Fed actions by finding US funds to be compelling deals on a relative basis. The Fed can usually affect only short term rates, which was one of the reasons they became aggressive in buying long term debt in their Quantitative Easing (QE) actions. Getting yields down for all durations is what made their actions were essentially unprecedented for the US. If they attempt to sell their holdings quickly to raise rates, there might be more buyers than they anticipate, making the action fruitless. It still looks like once the QE buying is done in the next few weeks the Fed will simply let their most of their holdings mature rather than force-feed them to the market. Listen for the word “macroprudential” in the next months. That's how Fed officials are describing the gentle prodding they may have to take to reverse their course. It turns out that some of the Fed members are worried their actions may encounter resistance, so they will resort to some arm-twisting to push banks to act in the manner they want. That hasn't worked well in the past, and it probably won't work well now, but it does add a word to our vocabulary.
Published August 22, 2014
Commercial and industrial loans took a while to start growing again, almost two years after the recovery started. Loans now total $1.7 trillion, the highest amount in the history of the data series, a little more than 10% of GDP. Overall, they are up about 40% on a current dollar basis since mid-2010.
Published August 15, 2014
As the number of employed workers has been slowly increasing, and the total workforce has been growing, initial claims for unemployment have been decreasing. The historical perspective is very interesting. This past recession, as bad as it was, did not come close to the levels of the 1970s and 1980s recessions (about 0.6% of the workforce). This most recent recovery is already at the best levels of prior expansions. It doesn't feel “that good”; what's different? The workforce has not kept up with population growth, and about 2 million workers have permanently left the workforce. Also, companies have been cautious in their hiring, meaning, that there are fewer workers to dismiss when businesses of the past needed to. One could look at the chart and say that when this ratio reaches this current level (0.2%) a recession has always followed. Probably not in this case: this ratio may go to unprecedented lower levels because of the workforce exodus and the slow pace of hiring that has made this recovery so different than previous ones. Economist Mark Perry at the American Enterprise Institute discussed the steady rise in job openings at his blog. They are at a 13-year high (not adjusted for population growth), and still less than January 2000 by 800,000.
Published August 8, 2014
Dr. Joe's Key Recovery Indicators were started in 2009, and track the monthly ups and downs of the economy in terms that are relevant to small and mid-size businesses.
Published July 30, 2014
Published July 17, 2014
Published July 10, 2014
The NFIB index has been trapped between the bottom of two recessions, that of the early 1990s and the early 2000s recession bottom. Though the latest report retreated a bit, it's still above the 2003 low. Small business is improving at a very slow pace, but this may finally be a good sign after the very disappointing Q1 GDP report.
Published July 3, 2014
The recovery indicators were mainly better this month, with the NASDAQ bouncing around then finishing well, and three of the four ISM indicators increasing. The one that didn’t is still firmly in expansion territory. The original estimate of proprietors’ income was $1,371 then it was reduced to $1,366 billion and now it’s $1,359.
Published June 24, 2014
The chart below shows the latest revenue data, on an inflation-adjusted basis, for ad agencies and publishers. Note how ad agency revenues are rising. While there have always been agencies that specialize in certain media, like television, direct mail, or others, the industry is media agnostic in the aggregate. Its job is to increase the positive visibility of its clients and help spur their customers into action.
Published June 19, 2014
RetailMeNot's report and the infographic are essential reading for print business owners because they offer a media executive's perspective on the nature of print. The executives perceptions of digital media are quite clear: "Seventy-five percent believe that digital consistently delivers better ROI – or "promotional performance" – at a lower cost than non-digital."
Published June 18, 2014
Published June 11, 2014
Since June 2009, rate of overall USPS price increases almost 4x the rate of increase in commercial printing prices
Published June 5, 2014
Published May 29, 2014
The Bureau of Economic Analysis released the second revision of Q1-2014 US Gross Domestic Product (GDP), indicating a contraction of the US economy in the quarter. As reported in prior (“laughable and embarassing”) analysis, an inventory buildup in the last two quarters of 2013 distorted the underlying condition of the economy.
Published May 29, 2014
Business conditions were generally good, with more than 33% reporting business increases of 6% or more. About 13% of respondents indicated business decreases of 6% or more
Published May 15, 2014
US employment data has many cross-currents: the unemployment rate is down, but the labor participation rate is at 35-year lows. Last week the Bureau of Labor Statistics published its JOLTS report, which shows they dynamic factors at play in the labor market. This chart shows the percentage of hires less the number of quits on a year-to-year basis. Note in the chart below the rapid rise in employment as the recession ended and the recovery began, and also how it has narrowed and turned negative in recent months. It's been mainly negative for about 18 months.
Published May 8, 2014
March 2013 US commercial printing shipments were down -$148 million (-2.2%) compared to 2012. The first quarter was down -$770 billion (-4%). On an inflation-adjusted basis, shipments were down -$270 million (-5.4%) and down -$1.05 billion (-5.4%) for the quarter.
Published May 8, 2014
The recovery indicators rebounded since last month. New orders for manufacturers remained at the same level that indicates growth.
Published May 7, 2014
Printing employment in April rose by 1,000 workers. It is always hard to determine if these were actual workers or if the changes were the result of issues with the estimation models of the Bureau of Labor Statistics. Production workers were the greatest part of the increase (800).
Published April 23, 2014
Below is the latest set of multipliers based on the Consumer Price Index. Multiply your historical financial statements by the figures below to adjust data to the CPI for the first quarter of this year.
Published April 18, 2014
For the year, profits were $4.34 billion. On an inflation-adjusted basis, that was the highest level of industry profits since 2007. This is despite there being $28 billion less printing shipments, 8,000 fewer printing establishments, and 73,000 fewer employees. It was the best profits per establishment ($173,000) since 2000.
Published April 10, 2014
One of the measures of the health of the labor market is the comparison of the total population to civilian employment. This measure has yet to approach levels achieved prior to the recession. This measure is important because it follows the growth in population. The number of workers is now nearly what it was at the start of the recession, but population has grown about 6% since that time. In rough terms, this means that the economy is short about 5.6 million jobs.
Published April 7, 2014
Published March 16, 2014
Since the second quarter of 2007, the first quarter for which we can create four-quarter inflation-adjusted moving totals, ad agency revenues are up more than 13%. Publishing industries have note fared well at all.
Published March 6, 2014
In recent weeks, readers have asked for industry demographics and some prognostication about them. The data tables are below. But first, some information about the data and where they come from. Get a strong coffee.