A remarkable thing happened today. For the first time in two years the estimate of United States economic growth was lower than our forecast. Despite weak fundamentals, U.S. GDP growth had been more rapid than our forecast due in part to temporary Government stimulus programs. The preliminary estimate of U.S. real GDP growth during January… Read more

It is time to write about inflation.  From fall of 2008 until about a month ago I was more concerned about deflation than inflation.  In my post last fall, I characterized the United States economy as being in a “Good-delation Equilibrium”, one that eased pressure on households and the Fed in a weak-demand economic environment. … Read more

Previously published March 22, 2011 in the California Economic Forecast I mentioned in the United States Highlights essay that the fourth quarter consumption growth rate of 4.1 percent, the strongest in five years, was a surprise given weak economic fundamentals. I also discussed the evidence of significant heterogeneity across U.S. regions. I would argue that… Read more

Previously published March 21, 2011 The Recent Evidence The United States economy continues to surprise me. Fourth quarter real consumption growth of over four percent, the fastest growth rate in five years, seems anomalous in the face of many fundamentals. I remind myself and the reader that one quarter’s worth of data does not make… Read more

The Federal Reserve released its 2010 quarter 4 Flow of Funds Accounts today. The 125-page press release and the related database includes a huge volume of data on all things financial for the United States. I will focus my comments on debt levels and on the wealth of the household sector. Quarter 4 debt of… Read more

The February United States jobs report came out this morning, and it is contains a glimmer of hope. This does not mean the recovery is strong yet. One month’s worth of data is nothing to base a trend on. There were 2 things of note that happened in February. Job gains occurred in the construction… Read more

At CNN’s request, California Lutheran University released its February jobs forecast today. The actual data will come out Friday. The weakness in jobs persists: the federal government’s net hiring is expected to be close to zero and state/local government’s net hiring is expected to be negative due to a lack of revenues, non-decreasing expenditures, and… Read more

The Bureau of Labor Statistics released their Employment Situation report for January today. The household survey data indicate a fall in the unemployment rate, however, this appears to be as much due to updated population controls as much as any other factor. As well, we have to wonder if declines in labor force indicate that… Read more

The recent GDP release for 2010 quarter 4 got me to thinking about consumption and investment. Consumption growth was very strong, especially considering the still high level of mortgage and revolving credit debt in the United States economy. I show three charts below: real consumption, real business fixed investment, and consumption’s percent share of GDP.… Read more

Mary Hanley and Dan Hamilton The January 25, 2011 DataQuick press release shows that both foreclosures and notices of defaults have fallen almost everywhere in California. Statewide foreclosures have fallen 21.9% from last quarter and more than 30% from the fourth quarter of 2009. The large drop in foreclosures may indicate lenders’ hesitancy to take… Read more