The Bureau of Economic Analysis released its first estimate of the United States 2010 second quarter Gross Domestic product growth rate today. Their estimated 2.4 percent growth rate was below most economists’ expectations, ours included. They estimate that consumption expenditures grew very mildly at 1.6 percent, investment expenditures grew massively at 29 percent, government expenditures… Read more

I discussed three stylized possible equilibria for the United States economy in a July 18 blog. The best equilibrium, one with rapid job and GDP growth and low inflation was relegated to an unlikely possibility at this time. The worst equilibrium of the three, the “bad-deflation” scenario, was one where debt-laden and cash-strapped consumers hold… Read more

Producer price growth has been declining for six months. It reached negative territory, deflation territory, three months ago, in April. This is extraordinarily unusual for the United States. What does it mean? Most of the June PPI deflation was due to declining food prices. Producer prices are up from a year ago, where of course… Read more

United States retail sales fell in June for the second consecutive month, to $360 billion dollars. This represents a 0.5 percent decline for the month, implying an annualized drop of six percent. Motor vehicles and parts also declined but at a much faster rate of two and a quarter percent for the month, implying a… Read more

The June United States nonfarm job level declined by 125,000. The decrease reflected a 225,000 decrease in the number of temporary employees working on the 2010 Census. The government sector decrease was offset by a private–sector payroll employment increase of 83,000. The unemployment rate edged down from 9.7 to 9.5 percent. The unemployment rate drop… Read more

Forty-six states face budget shortfalls of $112 billion for the fiscal year ending next June. While there are political difficulties in closing these gaps there are also constitutional mandates for doing so. If and when they close these gaps, it is likely that some of it will be constricted expenditures and this will filter down… Read more

We participate in the monthly Macro Markets’ survey of the Case-Shiller housing price index and the June results are online as of today, see the press release link here.  The consensus projection is slightly more pessimistic than our forecast on housing prices. Comments about this month’s survey: First, the consensus as measured by this survey… Read more

A brief update of a blog of about a month ago regarding banking: The FDIC reports that 83 banks have been closed so far this year. While there were 140 bank failures in 2009, we are on track (based on a simple extrapolation of current trends) to experience at least 160 bank failures in 2010.… Read more

The commerce department reported today that United States housing starts fell from 659 thousand to 593 thousand from April to May. This was the largest drop in starts since 1991. As well, building permits, which are an indicator of future starts declined to a one-year low. This is bearish news for the United States economy,… Read more

United States’ May Retail Sales were $362.5 billion, down 1.2 percent from April. The decline was broad based. Motor vehicles, building materials, gasoline, clothing, and general merchandise all fell significantly. Furniture/home furnishings, electronics/appliances, food, health/personal, and sporting goods/hobby were up but just a bit. Building material purchases dove 9.3 percent following an 8.4 percent jump… Read more