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The last oasis of prosperity, manufacturing, may be in the initial stages of sliding toward a recession — an ominous trend first identified in the Bloomberg Orange Book, then in the ISM’s purchasing manager indexes. Retail sales — an excellent barometer of the household sector — aren’t encouraging either, once adjusted for inflation. Manufacturing has benefited from the Federal Reserve’s low interest rate [...]
The Federal Reserve plans to buy an additional $40 billion a month of agency mortgage -backed securities and probably keep the federal funds target rate near zero “at least through mid-2015.” In a matter of weeks, the central bank learned the economy was on much thinner ice than it may have believed just a month earlier. Bernanke & Co. clearly has come [...]
A casual observer could be forgiven for thinking that this is a terrible year for shares. Europe has continued to convulse, the U.S. has seen growth slow to less than 2 percent and China’s economy has slowed as have the economies of Brazil and India. Still, the reality is that global shares are up 11 percent this year. Risks of extreme [...]
Expectations for the economy, the Fed and the fiscal cliff are intertwined and actions in each area influence actions in the other areas such that there are no silos in economics – or in policy. Fed action is not independent of economic expectations nor fiscal policy expectations. Therefore financial markets are caught in this recursive process of the economy, policy reaction and then [...]
It’s back to reality for the jobs situation; the economy added a lowly 96,000 nonfarm payroll jobs during August while the July report was revised lower to a monthly gain of 141,000 from a previously reported increase of 163,000. Investors should anticipate a similarly weak employment picture going forward as the economy is simply not advancing at a pace sufficient to engender desirable [...]
