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: 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.