Published June 22, 2018
Writedowns in the first quarter of 2018 for commercial printers with $25 million or more in assets were $157 million, or 1.9% of sales. The assets may be written down, but the borrowing that was created to finance them remains. Interest expense was 4.8% of sales. For the quarter, losses were -1.47% of sales. That rate of loss made average profits before taxes for the industry a mediocre 3% of sales—which means that printers with less than $25 million in assets must have done well.
Published June 18, 2018
Back in 2002, Dr. Joe agreed to do a regular column for WhatTheyThink for “only one year and no more”...for 15 years. This farewell column explains how it started, behind-the-scenes intrigue, the problems, and why it turned out the way it did. And then…he explains the exciting adventures ahead.
Published June 8, 2018
The May employment report was regarded as good, but when you dig past the top-level numbers, it was better than it looked. However, while the 3.8% unemployment rate looks good on the surface, it really can’t be compared to when it was last attained nearly 20 years ago. So many workers left the workforce that this figure implies a tighter labor than it really is. We will really know we have a strong economy when the active labor force starts increasing.
Published May 21, 2018
Some people say that the news is always bad, and they wish someone would report good news now and then. There is good news but no one seems to report it. You’d think that would be a full time job for someone. The economy has set a record for full time employment, and all we hear are crickets. The economy has been doing better lately in some key measures of employment, but the Fed is scaring markets by preparing to raise rates. TINA, meet TAMA, the result of the Fed’s actions; don’t worry, we’ll explain it. The statisticians at the Commerce Department revised printing shipments data. Revising data seems to be a full time job in the Beltway. Dr. Joe clarifies it all for one nearly last time.
Published May 18, 2018
Durable goods orders for consumers (less transportation) are growing at a rate almost two times faster than Real GDP. This data series remains -14% below where it was at the start of the recession in December 2017, and is a critical one to monitor for indications of an improved economy.
Published May 11, 2018
The Bureau of Economic Analysis’ advance report estimated that Q1-2018 real gross domestic product was up at an annual rate of +2.3%, which was slower than the +2.9% for Q4-2017. Because companies and individuals, especially corporations, shifted expenses into 2017 and delayed revenue recognition to 2018 to take advantage of the rates in the new tax law, many key economic data series—such as this one—will be subject to larger than usual revision.
Published April 16, 2018
“Staying the course” does not refer to golf, but might be an answer to “Aren’t we there yet?” When all of your economic models are based on something old, and not something new, that could make you blue, and confused. Since we’re now talking about weddings of the business kind, the Amazon-USPS wedding has gotten a lot of press lately. Don’t they take such a pretty picture together? Well, maybe not. The relationship solves one problem and creates another. No, not the in-laws again… what do they want now?
Published April 13, 2018
The Federal Reserve revised 2015–2017 industrial production down from its original reports, meaning that industrial production peaked in 2014 and then slowed. The initial data made things seem better than what consumers and employees were actually experiencing.
Published April 6, 2018
Q4-2017 GDP estimates were raised to +2.9% from the original estimate of +2.5%. (But beware inventories.) At the same time, shenanigans resulting from the latest tax bill are blurring statistics visibility, especially where corporate profits are concerned.
Published March 30, 2018
Forget postal reform; Dr. Joe Webb calls for privatization of the postal system.
Published March 19, 2018
Trade tariff talk has confused the markets, but so have the recent economic data. Employment data look great, retail sales look bad, consumer confidence surges in the lowest third of households by income. Explain that, Dr. Joe! He does, and offers insight into the selection of Larry Kudlow as the President’s economic advisor. There may be no free lunches, but Dr. Joe has some free podcasts and a webinar. Get them now before someone proposes a tariff on electrons.
Published March 9, 2018
The capital expenditures of commercial printers fell in 2016, but the investment in less expensive used equipment may have been a major factor.
Published March 2, 2018
Canada’s printing industry has been holding steady compared to the US, despite being subject to the same competition from digital media
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.