Importance of Hard Data: How Soft Data Can Mislead Decision-Makers

Published April 24, 2017

Every generation has a different perception of what the world is like. That difference may be appearing in surveys of consumer confidence and similar measures that businesspeople and economists have relied on. Hard data can be so cold, and those surveys added context and perspective with a view toward the future that historical data could not. Now it seems that “soft data” is softer than thought and may be misleading decision-makers about the marketplace.

The Fed’s Balance Sheet and the S&P 500

Published April 13, 2017

The financial markets were rattled a little bit by the recent minutes of the Fed meeting where they discussed the unwinding of their interventions and the ballooning of their balance sheet. The data are reflected in the St. Louis Fed Adjusted Monetary Base. The chart shows how the run-up in the S&P 500 stock index relates to the Fed’s quantitative easings

Dr. Joe Recommends: Restructuring of the Consumer Retail Market, Print Campaigns into Google Analytics

Published April 13, 2017

Dr. Joe Recommends: The Restructuring of the Consumer Retail Market. Eddy Hagen’s Blogpost about How to Get Print Campaigns into Google Analytics

Something’s Happening and It Just Doesn’t Feel Right

Published April 10, 2017

Friday’s unemployment report of 4.5% showed a thriving, healthy labor market in an economy bursting with growth. Not so fast… the cross-currents of the economy are quite different depending where you are, especially in the suffering retail markets. Media technology changes are letting communicators switch from gas guzzlers to more finely tuned approaches that squeeze budgets but offer similar results. There are print businesses thriving in this chaos, and Dr. Joe explains why even they have to remain vigilant and proactive.

US Commercial Printing Shipments on a Per Capita Basis

Published March 30, 2017

Yes, that sounds boring, but the data have been made interesting by including details about the last forty years or so of industry history and technological change. We added some statistical forecasts from our models that take the data out to 2025. When we started this chart almost ten years ago, those outlying years were near zero. They’re not any more (whew!). The data are inflation adjusted and based on the population data and forecasts of the US Census Bureau. It’s interesting how there are periods of relative stability, a change, followed by another period of stability. Technological change has been a much bigger factor affecting consumption than general economic conditions.

Dr. Joe Recommends: Digital Advertising Contracts Traded on NASDAQ?

Published March 30, 2017

Yes, that headline is correct as explained in a recent article. It’s the New York Interactive Advertising Exchange. Its founders were interviewed recently and explained the business.

Profits and Capex and Bears, Oh My!

Published March 26, 2017

Industry profits for 2016 were higher than 2015, but big printers were not riding high, they were writing down. Big used to mean big, but now small and medium are the rage as the changing nature of print demand makes the theme of short-run specialties for long-term profitability a big idea. And then there’s capital investment that makes all that possible. Its rebound continues in a manner that reflects a different industry. Is the post-election business enthusiasm a bubble about to burst? Dr. Joe explains.

Ad Agency and Publisher Revenues

Published March 23, 2017

Advertising agency revenues are having a slow rebound from their pullback in 2015. Publisher revenues are still having problems as ad pages and circulation are contracting. Clearly, agencies are finding other areas to garner revenues, especially in managing digital initiatives. Mobile communications are where their latest opportunities are, especially with website redesigns, creating the look and feel of content marketing for their clients, and assisting clients as they sort through the analytics that marketing automation offers.

Pew Surveys

Published March 23, 2017

It seems pretty clear that the last half of 2016 had a surge in activity for mobile communications.

Economy Sending Conflicting Messages? Or Is It?

Published March 13, 2017

“Just because you can, doesn’t mean you should” is the way the saying goes, and claiming some credit for a good job report on Friday was probably not wise. That old political rule of claiming credit for what happens on your watch though not caused by you has the underside of getting the blame for what you did not do. An important GDP forecast shows a very weak Q1, and the content creation businesses of advertising and design had declines in employment. Perhaps some weak economic conditions are what’s needed to get the Beltway’s priorities into the right order.

Is Sales Dying?

Published February 27, 2017

Dr. Joe wonders what’s happening to sales? The number of sales people in the economy is declining, and they’ve been essentially replaced by computers and server farms. All those sales call reports have been replaced by analytics. All that T&A expense became electrons. Entrepreneurship is critical to a growing economy, but having the right context to the statistics helps put it in perspective. And then there’s trade. Can we change the subject? Some economists are finally writing with clarity about the topic.

Consumer Inflation for 2016 at +2.5%, Giving Fed Reason to Increase Rates

Published February 23, 2017

Consumer inflation for 2016 was increasing, with December’s reading +2.5% higher than 2015. December’s rate alone was at a +6.6% annualized rate. The chart shows the monthly comparisons as the blue line and the year-to-year comparisons as the heavier red line.

The Latest 2017 Index of Economic Freedom

Published February 23, 2017

The Heritage Foundation has released the 2017 Index of Economic Freedom, one of my favorite resources. There are lots of data about international economies from the World Bank, the IMF, and others, but this is different, and is a great addition to that library. It includes insights into the regulatory environments of the economies, as well as the activities of black markets and corruption. The report is free, with a vastly improved interactive website, and downloads of the entire book or individual chapters. The list of country rankings is available on a page of its own. The top five are Hong Kong, Singapore, New Zealand, Switzerland, and Australia. Canada came in seventh, and the US fell out of the top fifteen for the first time, now ranked seventeenth.

Even the Digital Media Markets are Changing in The Third Wave

Published February 13, 2017

Sometimes naysayers get it wrong, and Dr. Joe thinks that some of the digital media experts are complaining too much about digital media growth slowing down to “only” 4x GDP. He thinks what they’re seeing are the benefits of marketing automation and a deeper understanding of analytics and ROI that mean dollars are spent more wisely. What does that mean for print? Time to take a new role in a third wave of media change. Are you ready?

Employment Stalls; Printing Shipments Fall Sharply in December

Published February 6, 2017

The national employment data may have had a headline of +227,000 payroll jobs, but the household survey did not indicate the same. Every year, the report released in February includes revisions to the prior year. The press release from the Bureau of Labor Statistics said that employment was “little changed.”

4Q-2016 GDP Slows to +1.9%, +0.9% Less Inventory Build-Up

Published January 30, 2017

The fourth quarter of 2016 ended quiently, with a growth rate of +1.9% compared to the third quarter. That brought 2016 to an overall growth rate of +1.6%.

Everyone loves Uber. But can the company survive?

Published January 26, 2017

Everyone loves Uber. But can the company survive? It's burning cash and piling up losses at an incredible rate, expected to be -$3 billion this year.

Real GDP for Six Presidential Administrations

Published January 26, 2017

A new administration is in Washington, so we created a chart that looks back at general economic conditions of the prior six administrations.

Economic Data Close the Books and Open a New One

Published January 23, 2017

The torch passes from one administration to another. How should the new administration be judged for its economics? The economy has a lot of ground to make up and population demographics make its urgency all the greater. The louder one complains on the campaign trail, the more responsible you have to be. What's the real story behind the complaints about trade fairness? It may not be about trade at all, but about what happens after the deal is done.

Small Business Index Rockets Up to Mid-2000s Level

Published January 12, 2017

The NFIB's small business index came in at 105.8. It has had two months near-vertical increase, now at levels not seen since December 2004 when it was 106.1. It's sheer optimism that small business concerns about taxes, regulation, and the economy will improve. There are many reports about improved confidence, especially among consumers, but it seems like it's too much too soon. While the new administration might be able to provide some regulatory relief in its early days, most of its desired actions require acts of Congress. Those can sometimes take forever... or longer.

Trade, World Economic Conditions, and I Love Lucy

Published January 12, 2017

The new administration is taking aim at trade agreements and some trading partners. The fear about this is likely overdone, and the focus will be more on what happens inside those agreements as practical matters

US Commercial Printing Industry Employment Finishes -2.5%; Consolidation Effects Evident

Published January 11, 2017

The US commercial printing industry finished the year with 439,900 employees, down -11,200 compared to 2015. The number of production employees was down -3,100, a -1.0% decrease. Non-production employees represented the biggest change, down -8,400 (-6.0%).

Recovery Indicators January 2017

Published January 9, 2017

With the Dow Jones and S&P 500 at all-time inflation-adjusted highs. The recovery indicators are stronger than they have been in a while, with very bullish increases in new orders for manufacturing and non-manufacturing sectors, and a strong reading of the NASDAQ stock index.

Third Media Wave May Trap Print Businesses

Published January 8, 2017

The beginning of the 2017 should be noisy from a political perspective, but the opportunity for distraction might be the biggest opportunity one can have. Stay focused as we're in the midst of a third media wave that may trap print businesses that have not prepared for it. And then there's the teenager who bought a newspaper. No, not a copy of a newspaper, but a newspaper business. This will be a strange year.

3Q-2016 Real GDP Revised Up Again; Did US Just Emerge from an Unrecognized Recession?

Published December 22, 2016

The Bureau of Economic Analysis released its third report of real Gross Domestic Product, at an annualized +3.5% over the second quarter. This is considered the final report, revising the advance report of +2.9% two months ago, and +3.2% in last month's preliminary report. This is important because each release of GDP data is based on increasing amounts of actual reported data. The advance report relies the most on estimates and models.

Technology is Powerful Stuff: Grab On or Duck

Published December 19, 2016

“It's not worth it for us” was the comment during a CEO panel that Dr. Joe attended, and that comment was about print. It was hard to take, but he wasn't surprised. What did the comment really mean? Does it fit with the unfolding new media allocation and shake-up ? Then Dr. Joe reviews the explosion in smartphones in information search and sharing, and how it exploded in the start of the holiday shopping season. What does it this mean for print, printers, and consolidation? Dr. Joe pulls it all together.

Commercial Printing Inflation-Adjusted Shipments Per Employee

Published December 16, 2016

The effects of consolidation, a challenging pricing environment, cost controls and productivity measures have sent shipments per employee to unprecendented levels. The prior peak was just before the recession began. The industry is more efficient in many ways, especially with the exit of weak and marginal establishments. But is it more profitable? In the December 15 webinar and in the new Forecast 2017 report, industry profit levels are discussed. Despite reaching new levels of sales per employee, profit levels have become tepid, a sign of tightening market conditions. In the webinar we discussed the possibility that another wave of media change is underway. The last major one was the rise of social media ten years ago, and now the growing impact of mobile media, especially this year.

Trump Inside the Beltway: Foggy with a Chance of Chaos

Published December 12, 2016

The Presidential transition certainly has its uncertainties. Traditional media had a tough election cycle, and that creates concern what business information executives can rely on as they make their plans. Perhaps they should just keep their heads down and focus on their customers and let the fog and chaos run its course. Small business is very optimistic, it may be too early to be so, but that's not stopping them or the stock markets.

Q3-2016 Real GDP Revised Up from +2.9% to +3.2%; Little Change in Yearly Comparison

Published December 1, 2016

The Bureau of Economic Analysis issued its second estimate of real gross domestic product, raising it to +3.2%. Real GDP for 2Q-2016 was +1.4%. Each advance release of GDP data is revised monthly as “more complete source data” is used rather than estimates. We prefer comparing GDP data to the same quarter as the prior year, which helps minimize the variation and possible distortions of seasonal adjustments. Compared to last year, Q3-2016 was +1.6%. Because inventory changes can distort GDP estimates, we also look at the data less inventories, and it shows the economy still hovering around a +2.0% growth rate. Lately, the inventory adjustments have been small. Theoretically, they should be zero in the long run, and for these last two quarters that has nearly been the case. In 2015, it averaged +$82 billion per quarter. Some of 2016's sluggish performance has been an inventory adjustment in the overall economy. The Atlanta Fed's GDPNow estimate for the current Q4 is running at +2.4%.

Print is Good. So What? Print is Intimidating. That Matters.

Published November 28, 2016

Dr. Joe went to lunch and heard a three-word sentence that changed his Graph Expo and his industry conversations thereafter. When he said those three words, jaws would drop, but curiosity would rise. The three words? “Print is Intimidating.” And we always thought we were being nice. Find out why in Dr. Joe's column.

Fed's Industrial Production Index Down for 13 Consecutive Months: A Recession on Inauguration Day?

Published November 17, 2016

Will the newly inaugurated President Trump be dealing with a recession like his predecessor did? In December 2008, a recession was declared, and the experts said it started almost a year before then. Several economic indicators, like durable goods orders and factory orders, have been negative compared to the prior year's level for almost two years. The Federal Reserve's Industrial Production Index released on November 16 marked its thirteenth consecutive negative comparison to the prior year. The only sector that is holding up in the GDP reports is the consumer side of that bookkeeping. That can't hold up for long unless the production and investment side of the GDP ledgers start to perk up. There is optimism in the markets about a Trump recovery, but it must be noted that there are many legislative hurdles ahead, and most economic plans take about 18 months to develop notable impact.

Stuff I Said in 2008: How It Turned Out

Published November 14, 2016

Eight years ago we were changing presidential paths as we are today, and Dr. Joe had a webinar amidst that tumult of the freshly declared recession, jittery markets, and that upcoming transition. This week, he goes into the archives and reviews what he forecast – and grades himself accordingly. He even gave himself an F for one of the forecasts – how did he do on the others?

US Commercial Printing Shipments in Mild Downturn; Employment Consolidation Continues

Published November 7, 2016

US commercial printing shipments for September 2016 were down -$8 million compared to the prior year (-0.1%). On an inflation-adjusted basis, shipments were down by -$118 million. Interestingly, inflation-adjusted August shipments were up by +$118 million, making the net change for the two months zero.

US Employments Report: Not What the Headlines Said

Published November 7, 2016

The business headlines about the October employment report may have said “unemployment rate falls to 4.9%; payrolls grow +161,000,” but the details of the overall employment picture deteriorated.

Recovery Indicators Mixed Again

Published November 4, 2016

Last month's recovery indicators bounced back big from a dreadful report, but this month's have moderated. The ISM manufacturing and non-manufacturing new orders decreased, but they are still above the 50 breakeven level, showing growth. The non-manufacturing side is still strongly on the growth side of the line.

Q3 Real GDP +2.9%; Soybeans Lead the Charge?

Published November 1, 2016

Prior to the release of Q3's advance estimate of real GDP, the Atlanta Fed's GDPNow forecast was +2.1%. The official figure came in much better, at +2.9%. It is likely to be revised down slightly, but it was a much better showing than recent data.

National Retail Federation Forecasts +3.6% in Holiday Retail Sales

Published October 29, 2016

The National Retail Federation issued its forecast of holiday retail sales. It expects a +3.6% increase compared to 2015. But what's the real increase? After deducting for inflation, that's about +1.5%. If real GDP comes in at +2% in the October 28, 2016 advance report for Q3, holiday retail sales growth will be in line with the growth rate of +1.4% for the year. In some ways, this can be a good year compared to recent history. Holiday retail sales have averaged +2.46% since 2007, with a net after inflation of only +0.64%. On a per person basis, that's actually a decline in that period.

GSMA Intelligence Mobile Trends

Published October 27, 2016

Mobility and Print Align at an Opportune Time

Published October 24, 2016

There's nothing like print enriching itself, and mobile might be the way to do it. A surge in mobile information preference is underway. How should printers plan? Diving in of course, by turning on static print materials into Internet and other gateways. If printers have sidestepped the digital media revolution to concentrate on the media they do best, this may be an opportune time to enliven their offerings as technology, economics, and consumer preference seem to be aligning themselves in a very special way.

Per Capita Pounds of Mail

Published October 13, 2016

Since the beginning of the economic recovery in 2009, first class mail is down by -12%, standard mail (discounted bulk mail) down by -18%, and periodicals down a whopping -32%.

Recovering Recovery and Quadrennial Snapshots: More Logical than it Sounds

Published October 10, 2016

For once the employment report was bad on the outside but good on the inside. Printing employment continues to show consolidation effects. The recovery indicators have their own recovery. August printing shipments are big, making up for July’s disturbing decline. Dr. Joe’s good Graph Expo included a visit to the Printerverse and a digital book discussion worth watching.

Q2 Real GDP Revised Up to +1.4%; Durable Goods Orders Contracting for 20 Months

Published October 4, 2016

Real GDP for the second quarter got its final revision, and was raised from +1.1% to +1.4%. Regular readers know that we prefer to look at real GDP on a year-to-year basis, excluding inventories, to give a better long-term view of the economy. The second quarter had an inventory correction, which seemed overdue.

Manufacturing May Be Declining, but Real Retail Sales are Still Positive

Published September 22, 2016

Data about manufacturing from the ISM and the Commerce Department have show a contraction compared to the prior year. In some cases that slowdown and contraction has been in process for 18 or more months. Retail sales and consumer spending have been the brighter spots of the economy. The inflation-adjusted growth rate of retail sales has been slowing since the beginning of 2015.

Worth Reading: History of JFK's Economic Legacy

Published September 22, 2016

Traditional Publishing Ebbs, and Oh, Those CMOs

Published September 19, 2016

Remember that “content is king” thing? The king is losing money. Worldwide ad agency Carat is forecasting moderate growth in advertising, but major shifts in the way ad budgets are spent. It's a fascinating look at worldwide communications with significant implications for printers of all sizes. And then those CMOs... just when they think they have it figured out, they're getting fired again.

Pew Offers Essential Insights into Book Readership

Published September 15, 2016

The Pew Research Center's recent report about book reading gives us a peek at the relationship of print and digital media. The report says “A growing share of Americans are reading e-books on tablets and smartphones rather than dedicated e-readers, but print books remain much more popular than books in digital formats.” The chart shows what formats their respondents used in the year prior to the survey. Only 6% were digital-only readers. The report states that 26% read no book in the last year; they may have read other things, but not books. Contrary to many reports about the “demise” of e-books, that has risen from 17% to 28%. It's been stuck there for three years. Print-only readers were 39% (remember: that used to be the entire market of book readers). Print and digital readers are now at 29%. Add the 6% digital-only, and you're at 35%. Content needs to be available in multiple media. Media selection is based on many factors, such as time, convenience, price, income, education, age, and others. Pew also offers insights into the use of audiobooks. The report is free can be downloaded from the Pew Research Center. One other note: when you hear that tablet sales are down or that e-book reader sales are down, keep in mind the versatile use of smartphones and their growing role in content engagement. Among readers 18-29 years old, 22% of them are reading books on their smartphones, 4x more than read them on e-book readers.

Employment, Shipments, and Profits: The Objects of Inflection?

Published September 12, 2016

Employment and GDP reports did not inspire, and July's printing shipments made us ponder. In the printing profits data, smaller did better, again. Ponder this: have print's gargantuans lost their economies of scale? Big was supposed to be better, smarter, and sturdy. It turns out that the big interest in big printers was of the loan payment kind. If pondering makes you hungry, you might consider some food shopping. They say the price of food is down but, alas, we learn it's just less up.

Four of Six Recovery Indicators Fall, Two Now Below Levels of Last Recession

Published September 8, 2016

The recovery indicators were hit hard last month last month, with two of them falling below the levels at the start of the last recession. Those levels were the readings of these indicators for December 2007.

US Commercial Printing Shipments Have Rough July

Published September 7, 2016

The reversal in trend for US commercial printing shipments went from somewhat benign to significant in July's data. Last year, the industry was relatively stronger than 2014, but shipments have been on a downturn for the last four months of reporting.

Real GDP for Q2 Revised Down Slightly to +1.1%; Durable Goods Orders Still Contracting

Published August 29, 2016

The latest revision of real US GDP for Q2-2016 dropped from +1.2% to +1.1%. The estimate for Q3 from the Atlanta Fed is above +3%.

Don't be in the One in Seven

Published August 25, 2016

One in seven US households has negative net worth, according to Bloomberg. It was based on a new report by the New York Federal Reserve. According it Bloomberg, “

E-Commerce and US Retail Sales

Published August 25, 2016

E-commerce has been running at the rate of 15% annual growth for many years, but is just 8% of retail sales. That seems tiny in relation to what we've seen happen to print promotions like catalogs and direct mail, and the rise of zombie or troubled shopping malls. The problem is that big ticket items, like autos, raise the size of retail sales. Those items may be researched online, but their actual purchase is not made until it is transacted at a car dealer. Restaurant purchases are also a distorting issue in the data. This chart explains it a little better. E-commerce sales is at the bottom (red line). In the second quarter, it was just short of $100 billion. The blue line is retail sales less vehicles and parts. The green line has food service sales deducted. The black line had e-commerce sales deducted, and shows retail sales through traditional channels. Those sales through older channels are lower than they were at the start of the recession. All of the growth in non-auto and non-restaurant retail for the last decade has occurred in e-commerce channels.

Straightforward Economics; Can You be Trusted with “The Good Leads”?

Published August 22, 2016

There are signs of economic slowdown despite what cable's talking heads say. The disparity of consumer prices and printing prices help explain the forces of consolidation and why print businesses need to have a constant review of their costs and value creation capabilies. The Australia Census folks may need to paper over a computer problem. Nothing helps improve sales more than leads, sales leads, the good leads.

Commercial Printing Employment: Production Employees Up +0.7%, Administrative Down -8.1%

Published August 11, 2016

Since January 2013, the number of production employees in commercial printing establishments has grown slightly, and is up +0.7%, from 307,700 employees to 310,000. Other employees, which are mainly administrative including sales, are down -8.1%, from 145,000 to 133,300.

Changes in Employment, the Economy, and Print

Published August 8, 2016

Nothing is ever what it seems, and that goes for last week's employment report (again). Ripples of consolidation are seen in printing employment data. There's growth in the advertising and design markets, and pain in publishing. Dr. Joe puts GDP and printing shipments into historical context. The iPhone is a means to explore the topic of trade. No, Dr. Joe's not trading in his iPhone.

US Commercial Printing Shipments for First Half of 2016 Up +1%; Q2 Shipments Decline

Published August 5, 2016

In data released by the US Department of Commerce, commercial printing shipments for June 2016 were down -$58 million compared to last year (-0.8%). On an inflation-adjusted basis, shipments were down -$130 million (-1.8%).

Recovery Indicators: 3 Up, 2 Down, 1 Unchanged

Published August 4, 2016

The NASDAQ had a good month, rebounding by 6.5% last month. Compared to last year at this time, the NASDAQ is up +0.6%, which is a negative return compared to inflation (less inflation it is -0.5% because the CPI is +1.1%).

GDP Revisions Show Declining Growth Rate Since 2014

Published August 2, 2016

The annual multi-year revision of US GDP data was released on Friday. The new data reflect more complete reporting of the thousands of data series that are used in the calculation of GDP and less reliance on estimated data. The revisions cover GDP from 2013 to the present reporting.

S&P 500 Real Sales per Share Reflects Struggling Economy

Published July 28, 2016

A way of judging the health of the economy is to calculate the inflation-adjusted sales of all of the companies in the S&P 500 and divide it by the total number of public shares. This index should have a natural upward bias. S&P 500 companies are very large, and acquire or merge with other companies, many of which are outside of the 500 companies. Buybacks of stock, which has been a trend of note these last five or so years, reduce the number of shares, or slow the growth in shares, reduce the denominator, again, giving it an upward bias. Instead, this measure has suffered. It peaked in 2007, and has yet to surpass that level. This means that corporate profits, which have generally been good (though slowing lately) have been managed by refinancing of debt to lower interest rates and reductions in costs and expenses. Those better profits are not the result of increased revenues. Slow, sluggish economic growth is reflected in these figures, and is a reminder that one should not look only to GDP as an indicator of the true health of the private sector.

Are You Ready for Atomic Memory in the Hands of Big Brother when You're Texting and Walking?

Published July 28, 2016

Dr Joe on Atomic Memory, Audio-enabled mobile coupons, Digital ad spending of US retailers, Barron's market data calendar,

Look What I Found! Print!

Published July 25, 2016

An Olgivy & Mather executive discovers print. We need to discover it, too, looking at print through the eyes of our clients and prospects. It's not that print is dead or not dead, there is a generation of media buyers for whom print is not alive. This ad exec's comments are vital in understanding how to make print relevant and, surprisingly, new.

Employment Data Discombobulation Might Require an IRL Meeting

Published July 11, 2016

Commercial printing's workforce reflects consolidation and leaner management. Last week's employment data was so haphazard it looks suspiciously like a dart board was involved. The USPS still needs to be Spooner-fed. If this all sounds confusing, perhaps it's time for an IRL with Dr. Joe.

Recovery Indicators Better than Recent Economic News

Published July 7, 2016

The recovery indicators showed better economic activity in June. This ended the second quarter in a manner that seemed contrary to many recent economic data.

Are We Headed to QE4?

Published July 7, 2016

This chart shows the Fed's balance sheet in the format known as the St. Louis Adjusted Monetary Base. Prior to the doubling of that balance sheet, it was growing at the annual rate of 6%, which was basically comprised of the long term rates of 1% for population growth, 2% for inflation, and 3% for economic growth.

Dr. Joe Recommending Reading

Published July 7, 2016

Recommended reading and news from Dr. Joe Webb

May Printing Shipments Up +1.2% Versus 2015; Trend is Flattening

Published July 6, 2016

US commercial printing shipments for May16 were $7.37 billion, the highest level in current dollars for the month since 2013. For the first five months of 2016, shipments are up approximately +$476 million in current dollars (+1.4%) and up +$79 billion after inflation (+0.2%)

US Q1-2016 GDP Revised to +1.1%

Published June 30, 2016

US real GDP for Q1-2016 had its third and final revision in this reporting cycle, and was +1.1% on an annualized basis compared to Q4-2015. Q1 had been reported as +0.5% in its advance report, +0.8% in the preliminary report, and now as +1.1%. Real GDP remains very low compared to the post-WW2 +3.3% rate.

Mixed Signals, Chaos, and Bureaucracy

Published June 27, 2016

Last week, the polls were wrong and Brexit rattled the markets. But the people most worried were central planning bureaucrats who wonder how to make sure it never happens again. The number of business establishments and microbusinesses are still growing. Durable goods orders send another recession signal. It’s another week of mixed and mixed up signals, something economists like because it makes them look busy.

Industrial Production Continues its Negative Turn

Published June 23, 2016

The Fed’s own data probably caused them to have a more dour outlook about the economy. The chart shows that US industrial production started slowing at the end of 2014 and has been in outright contraction since Fall 2015.

The Fed Backs Off – No Increase, More Worry

Published June 23, 2016

The Federal Reserve’s latest statement shows continued befuddlement about why they can’t get inflation moving higher and why the raw numbers of employment are weak. So they called a time out and will wait for things to change.

Print: The Antidote for Ad Blocking?

Published June 23, 2016

Is this print’s chance to make a flanking move into the marketing budget. The eMarketer analyst says “Ad blocking is a detriment to the entire advertising ecosystem, affecting mostly publishers, but also marketers, agencies and others whose businesses depend on ad revenue.” He then says, “The best way for the industry to tackle this problem is to deliver compelling ad experiences that consumers won’t want to block.”

Advertising Rebounds in Q1-2016 v 2015; Publishing Still Struggles

Published June 16, 2016

Advertising agency had a much better first quarter than last year, up by nearly $3.9 billion on an inflation-adjusted basis (+16.5%) according to the most recent Quarterly Services Survey. Advertising revenues had slipped in 2014 and 2015, in similar pattern to the decline in durable goods and other manufacturing orders and shipments.

Prices for Advertising Rise for Magazines, Stable for TV and Newspapers, Down for Digital

Published June 16, 2016

The chart shows that magazine advertising has gone up by more than 20% since 2010, but it's hard to know how much might have been bundled in those prices. Pricing reports sent to the Bureau of Labor Statistics are supposed to be in constant units, but it's hard to determine those in service environments, and it's hard to quantify a wink or a nod in an advertising agreement.

Get Linked Into What Dr. Joe's Reading Lately

Published June 16, 2016

Dr Joe on Microsoft buying LinkedIn, restaurant kiosks, investments in rewards programs, mapping GDP.

Smaller Printers Are Giants in Profits

Published June 9, 2016

The changes in the media markets led to the declines in magazines, catalogs, newspaper inserts, and many of the products produced by large printing organizations. For years, these companies were giants in the industry, but recently this sector has been restructuring through consolidations. Writedowns in goodwill and for closed plants have cut the profits of these organizations.

Q1 Printing Profits Rebound; Large Printers Still Lag Smaller Establishments

Published June 7, 2016

The profits before taxes of US commercial printers rebounded in the first quarter. Profits for the quarter are estimated at $1.37 billion, the highest level since the third quarter of 2013, when they were $1.42 billion adjusted for inflation. Profits were $810 million for the first quarter of 2015, making this a significant turnaround.

Consolidating Printing Employment, Shipments End a Streak, and an Ugly Employment Report that Dresses Nice

Published June 6, 2016

Things are not what they seem. Streaking was not good in the 1970s, it’s definitely not good on presses, but streaking is great when it’s a growth streak in printing shipments. Unfortunately, the latter has ended, so let’s start a new one. The employment report was bad but that made interest-rate worriers happy. There’s nothing like getting statistically giddy over the numerical misfortune of others. Maybe they need to find a niche like a very happy Vancouver printer did.

Q1-2016 Real GDP Revised Up to +0.8%; Economy Already Recovering from Mini-Recession

Published June 2, 2016

The first estimate of Q1-2016 GDP was +0.5%, and that was revised up slightly to +0.8%. The concerns about recession are being reduced lately with some better economic news that show the economy on its sluggish pattern of sub-par growth in the +2% range, well below the post-WW2 average of +3.3%. As noted many times, there are numerous economic indicators that have yet to reach their pre-recession levels. Since this pattern has been so long in duration, even non-money denominated statistics, such as employment, have to be adjusted by population growth to discern true underlying levels. The chart shows Real GDP on a more conservative year-to-year basis as reported and with the volatile effects of inventory changes removed. The economy still seems to be digesting some long-term inventory rebalancing, some of which is related to global currency and other economic issues. The slowdown of the first quarter still seems to be limited to the first six weeks of the year. At the time of this writing, the Atlanta Fed's GDPNow estimate of Q2-2016 is at +2.5%. While that is a disappointing level, it is consistent within the lackluster level of economic growth that has come to be known these past years as “new normal.” Since 2011, real GDP has averaged only 2%. The difference in the average may not seem a lot, but a 2% annual growth rate will result in an economy doubling in size in 39 years; at 3.3%, it doubles almost 16 years sooner.

A Dr. Joe Potpourri: Meeker’s 200 Slides, Marriott Gives Points for (un)Cleanliness, and OECD Says the New Normal May Not be New, but It’s Still Here

Published June 2, 2016

A Dr. Joe Potpourri: Meeker’s 200 Slides, Marriott Gives Points for (un)Cleanliness, and OECD Says the New Normal May Not be New, but It’s Still Here

What Dr. Joe's Reading: USPS Makes No Cents, CMOs Seek Doers and Thinkers, Managers Work Overtime over the New Overtime Rules

Published May 26, 2016

What Dr. Joe's Reading: USPS Makes No Cents, CMOs Seek Doers and Thinkers, Managers Work Overtime over the New Overtime Rules

Retail Sales Growth Rates Reflect Changes in Competition and Consumer Preferences

Published May 26, 2016

Department stores are still having problems. Their year/year growth rate has been negative for more than a decade. E-commerce sales are maintaining a 15% growth rate. At that rate, they double every five years. The last peak in growth for retail sales excluding motor vehicles was in late 2011, and that rate, unadjusted for inflation, has slowed to the 2% range. Retail sales are a function of household income, and their costs, and they remain sluggish as median household income has still not reached the level it was at the beginning of the recession. In the meantime, shopping malls, the department stores that anchor them, and mall owners are having problems. A Weekly Standard article about Amazon has some insights into it. The downslide of brick and mortar retail stores and malls can create collection problems for printers who sell to them, but there are changes underway that might hold some opportunities for those printers who seek them. Developers are using mall complexes for new buildings that include office space and even hospitals and hockey rinks. There are also new efforts to treat the shopping experience not just as a matter of location, but holistically to include all digital touchpoints inside and outside the mall. How will much of this be communicated? It will often require signage, working closely with store owners and local mall management. Those printers, attuned to the nature of communications logistics and data management, can find opportunities there.

Government Shipment Revisions Make Everything New Again (Not Really)

Published May 23, 2016

Eventually, the numerous economic data published by the Federal government are right. Like wine, it takes time. As businesspeople, we can’t always be that patient.

Printing Industry Shipments Revised from 2007 to 2016, with Minor Changes Since 2009

Published May 19, 2016

The years 2008 through 2013 had slight revisions higher; the end of 2013 to present had slight revisions lower. The Commerce Department's revisions to all manufacturing data are leading up to a multi-year revision of GDP data at the end of July.

One Printer Uses “Print is Dead” to Get Into the Minds of Content Creators and Decision Makers

Published May 19, 2016

One printer has taken the “print is dead” concept and is making presentations to communicators about how print works with digital media.

Manufacturing Still in Contraction

Published May 19, 2016

The latest Federal Reserve industrial production index showed a slowdown since late 2014 and an outright contraction since mid-2015 is still in process. The business press focused on the comparison to the prior month, which looked like an improvement. The chart, however, compares to the prior year. Recent consumer retail data have been more optimistic, and the premise that we had a “micro-recession” at the beginning of the first quarter seems to be justified. There is growing pressure to weaken the US dollar to make manufacturing exports less expensive to international customers. The Atlanta Fed's GDPNow estimate for Q2 GDP is now +2.5%. At that rate, it would be a rebound from Q1's +0.5%.

Graphic Design Employment Up +6%, Agencies up +2.8%

Published May 12, 2016

Content creation is in a strong uptrend based on the latest employment data. Graphic design employment is up +6%, and has taken over from public relations employment as the surging area of hiring.

Dr. Joe's Reading for a New Day

Published May 12, 2016

Recommended reading from Dr. Joe Webb: It's the end of days for London's print newspaper New Day. Atlanta Fed's GDPNow Model Estimating Q2-2016 GDP at +2.2%, Lingering Effects of Recession, Justice Denies Staples and OfficeDepot... Again. Rubbing Sahl in an Old Wound

Do You Have a Culture of Honest Data?

Published May 9, 2016

The latest employment report had analysts scratching their heads. One ugly report does not a recession make, and things may not be as bad as it seemed. It could just be the same old lackluster recovery. Joel Quadracci had some interesting comments about Quad's restructuring efforts that have a good lesson for all managers. Honest data can take a beating in politics, whether they're in elections or in business offices. Does your business have a culture of frankness in the way it reports information?

19 Consecutive Months of Improved US Commercial Printing Shipments

Published May 5, 2016

US commercial printing shipments have increased compared to the prior year for 19 consecutive months. March 2016 shipments were up +$85 million (+1.1%) in current dollars compared to 2015, and +$22 million (+0.3%) after adjusting for inflation. February 2016 shipments were revised up by $2 million.

What Dr. Joe's Reading about Apple, Digital Signage, and USPS Worker Mood

Published May 5, 2016

What Dr. Joe's Reading about Apple, Digital Signage, and USPS Worker Mood

Recovery Indicators Better than the Recent General Economic News

Published May 5, 2016

The recovery indicators are more positive than the general economic news. One of our indicators, the NASDAQ, is down -1.7% since last month. It's been on a rocky road for the last three quarters. Its recent peak was 5218.86 in July, and it has not gotten really close since. Stock market concerns have focused on a decline in the rate of corporate profits, and Apple's recent financial report did not really help matters. There was a bullish rise in non-manufacturing orders. Manufacturing new orders index might look like a decline, but it is still indicate moderate growth. Proprietors income, a measure of the health of small business, was up only slightly. Other reports of small business health have not been good, especially the recent NFIB Small Business report. This month's recovery indicators don't indicate recession, a word that is bandied about with greater frequency lately, but support the continuing unsatisfying levels of slow but positive growth.

Q1-2016 GDP +0.5%; Inventory Correction Finally Arrives

Published April 29, 2016

US real GDP for Q1-2016 was reported at annual growth of only +0.5% compared to Q4-2015. On a year-to-year basis, the growth rate was +1.95%. The inventory adjustment that the economy has needed finally came, with the lowest net inventories in two years. Real GDP growth less inventories was +2.3% on a year-to-year basis.

S&P 500 Revenue Per Share Still Lags Economy

Published April 28, 2016

Everyone knows that the stock market is up from its lows at the bottom of the recession,but one obscure but key measure underscores how sluggish the economy has been. The S&P 500 should have a bias of steadily increasing revenues. It has most of the best companies in the world, with international presence in the globe's growing markets and a foundation in the established ones. It is rare for companies to be dismissed from the S&P 500, but companies are added all the time. When S&P companies merge, they create a new entity of combined revenues, and another company is added with new revenues to add to the index. The other upward bias should be the high level of stock buybacks buy these large companies, as they borrow money at low interest rates and create “shareholder value” by reducing the number of shares and increasing the value of each share of stock. We've called this cowardly, as it increases earnings per share (EPS) without needing to increase total profits. So this revenue per share should be steadily increasing with a growing economy in a recovery that started in mid-2009. It seems that companies have done a much better job of financial engineering than they have in creating revenues.

What Dr. Joe's Reading: Apple's Horrid Quarter Produces a Paltry 20% Profit; Smartphones and PCs; Labor Shortages

Published April 28, 2016

What Dr. Joe's Reading: Apple's Horrid Quarter Produces a Paltry 20% Profit; Smartphones and PCs; Labor Shortages.

Less Gets More, Models and Supermodels, and Why True and False Should Add Up

Published April 25, 2016

The latest government data show fewer commercial printing establishments, fewer employees, but higher pay. Now that more economic data are negative, we should really know if forecasting models economists use make any sense beyond predicting the past. Many of those models use spreadsheet software, and some programs can't make what's true and what's false add up. Yes it's a Dr. Joe potpourri.

NFIB Small Business Index: A New Recession for Main Street?

Published April 21, 2016

Economic data have been conflicting of late, but there is one consensus in the data that is clear: the small business economy did not recover from recession, and looks like it’s back in recession territory. There are many indicators we use for small business but one that is watched often is that of the NFIB. It is published monthly and has a long history. US government data focuses attention on the largest businesses because they represent big chunks of the economy and report some kind of data, especially payroll data, with great frequency. Think of it as counting whales rather than minnows. Their recent analysis said “The small business sector... is underperforming, doing little more than operating in maintenance mode. Slow economic growth is now just a result of population growth, more haircuts, retail customers, health care patients, etc. But there is no exuberance, no optimism and not much hope, the numbers make it clear.” Economies stuck in +2% growth mode tend to do that.

Dr. Joe’s Latest Reading About Marketing, Loans, Recession, Taxes

Published April 21, 2016

This week's recommended reading and articles of interest to media and printing executives.

2014 US Commercial Printing Capital Expenditures: New Purchases Down, Used Purchases Up

Published April 19, 2016

The US Department of Commerce recently released its Annual Survey of Manufactures Capital Expenditures report, issuing data for 2014.

The Fed Never Really Stopped QE3

Published April 14, 2016

This week’s chart shows the aggressive actions of the Federal Reserve after the housing bubble. For decades, the Fed’s balance sheet increased by about 6% per year, averaging about half inflation and half economic growth. The rocket-like rise when the bubble burst is clear, and then the three steps up of each of the quantitative easings are plainly seen. The Fed has wanted to raise rates for some time, but they have also wanted to stop the buying of government instruments that characterized the QE programs. They create shortages of publicly traded bonds which increases their prices, which makes the effective interest rates low. Rather than ending their purchases, the Fed has been replacing matured obligations. In effect, this keeps QE3 going. Can the Fed ever end it? They may hold on and hope that over time that economic growth and inflation catches up to them in time, but that can take forever, or perhaps longer. It will be difficult for the Fed to end its policy without robust economic growth that will give them the flexibility and opportunities to unwind their holdings. Should a recession begin, or a new financial crisis emerge (even an internationally) the Fed might need to create an additional QE effort.

USPS, Shiny Objects, Recovery, and Recession

Published April 11, 2016

The USPS exigent price increase has expired, and USPS says they “will lose approximately $2 billion in annual revenue resulting from a price reduction” which they knew was going to expire. The increase was to help “recover for the massive volume and revenue losses resulting from the Great Recession.” Yet, Dr. Joe shows that the declines in USPS volume kept declining after the economic recovery began in mid-2009. Then Dr. Joe talks about recession in light of recent economic data. Yeah, they’ll be calling him Dr. Doom again.