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

I hope we’re a bit farther along than this, but maybe not: “epidemiology in the nineteenth century was much like economics in the twentieth century: a subject of intense public interest and concern, in which theories abounded but where the scope for controlled experiment was limited”  Cooper

I was listening to Bloomberg radio this morning on the way to work.  They were a bunch of happy folks there.  The markets are up, and some earning reports are up.  Then, they came to the consumer confidence numbers, which came in worse than the consensus forecast.  Nothing here to disturb the Bloomberg team.  They… Read more

Previously published on NewGeography.com on 6/19/2010 The most fanatical Keynesians are losing their composure. Brad DeLong, a prominent Berkeley economist and Keynesian, is virtually yelling that “We Need Bigger Deficits Now!”, emphasis his. Paul Krugman does DeLong one better, calling proponents of fiscal responsibility madmen. They are following the gospel of John Maynard Keynes, who… Read more

Previously published on NewGeography.com on 7/11/2010 A year ago we were hearing all about green shoots. Analysts claimed to find them everywhere. Today, we never see the term. In fact, there seems to be a growing malaise. By the end of June the first quarter’s Gross Domestic Product (GDP) estimate was revised downward a full… 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