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: 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: May 25, 2017
The Commerce Department’s revisions to industry shipments show a much different picture of a key metric for the industry, sales per employee. The chart was created using 12-month moving totals of inflation-adjusted shipments and the 12 month moving average of total industry employment. The latest reading through March 2017 is $182.65 per employee, a meager +1.5% higher than it was at the end of 1992. It fell from a peak of $195.51 which was just before the burst of the housing bubble, the rise of social media platforms, tablets, and smartphones. The fall in this calculation has some interesting characteristics. Historically, large printing businesses focused on magazines, catalogs, and newspaper inserts, had sales per employee that were significantly higher than the industry averages, anywhere from 30% to 50% higher.
Published: May 11, 2017
The Commerce Department tracks the number of business establishments by industry, and among he more interesting reports is the calculation of new and closed businesses. The data take a while to be released, and these new data about 2014 were recently made available. There’s a word of caution here. If someone was a corporation and decides to become a partnership or a proprietorship, that counts as one business closed and one business opened. And then there’s “poor man’s mergers” where two business owners decide to close their two businesses and open one new one. Same people, same equipment, no real change except to the tax authorities and government statisticians. The most important number is the net change of births less deaths. In the worst of the recession, the net number was 6% of establishments. For 2014, that had fallen to a little more than 2%.
Published: April 27, 2017
In what is not a surprise to many, the job shop operational structure of many printing businesses put the industry near the bottom of all manufacturing industries in terms of its management processes.
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
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.
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.
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.
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.”
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%.
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.
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.
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%).
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.
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.
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.
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%.
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.
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.
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.
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.
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.
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.
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%.