July 18, 2014

AP’s Crutsinger Thinks Today’s Econ News Was Good; Bloomberg’s Glinski, Not So Much

There were two pieces of significant economy-related news today. The first was that the Conference Board’s index of leading economic indicators increased for the fifth straight month, this time by 0.3 percent, while May’s increase was revised up to 0.7 percent. The second was that the University of Michigan’s preliminary June reading on consumer confidence came in at 81.3, a decline from May. Both results trailed expectations.

Predictably, the Associated Press’s Martin Crutsinger put a smiley face on the news, believing it shows that “that economic growth should accelerate in the second half of this year,” while Bloomberg News’s Nina Glinski was more sanguine, interpreting the confidence report as an indication that “Americans’ outlook for the economy dimmed.” Excerpts from both efforts follow the jump.


Latest PJ Media Column (‘D’Souza’s Next Film’) Is Up

It’s here.

It will go up here at BizzyBlog on Sunday morning (link won’t work until then) after the blackout expires.

June Ohio Jobs Stats: 5.5% Unemployment; 13,500 Payroll Jobs Added; Workforce Shrinks Again

Filed under: Economy,Ohio Economy,Taxes & Government — Tom @ 11:22 am

June’s Regional and State Employment and Unemployment News release tells us that Ohio’s unemployment rate remained at 5.5 percent, that the state picked up 13,000 payroll jobs, and that its workforce shrunk by 4,800.

And once again, the state’s “honor roll” performance in “significantly” adding jobs, supposedly 29th in the nation in adding jobs during the past 12 months, really isn’t:


“Ohio: We’re number 34!”

As to the workforce and payroll employment growth:


While the nation’s civilian labor force has increased a bit during the past 3-1/2 years — but by nowhere near enough to absorb all new potential workers, thereby causing millions of discouraged Americans to go to the sidelines — Ohio’s has shrunk.

In the three years ended in May (latest stats available), Metro Columbus’s labor force has grown, meaning the shrinkage in the rest of the Buckeye State has been even more severe than statewide stats would otherwise indicate.

The state’s payroll employment growth during the past 3-1/2 years trails the rest of the nation, while Metro Columbus’s beats it.

Take away Metro Columbus, and payroll employment growth in the rest of Ohio is less than two-thirds of that seen in the rest of the nation — and volumes have been written about how job growth since the recession ended has been completely unacceptable.

July 17, 2014

AP Quickly Buries Bad Housing News, While Reporter Crutsinger Blames It All on ‘the South’

Late this afternoon, I went to the Top Business Headlines page at the Associated Press’s national web site to get today’s new home construction news. Because the AP didn’t have a story there (saved here for future reference), I knew it had to be bad, especially because to ignore it, the wire service made room in its Top 10 stories for an item on Toyota experimenting with fuel cells and aircraft orders at an air show in England.

The Census Bureau reported that seasonally adjusted housing starts fell by 9.3 percent in June after declining 7.3 percent in May. Seasonally adjusted applications for new building permits declined by 4.2 percent after a 5.1 percent revised May drop. Reporter Martin Crutsinger, doing his utmost to earn the “Worst Economics Writer” tag the National Review’s Kevin Williamson conferred on him last year, blamed the weather, blamed “the South” without telling readers how the Census Bureau defines it, and ignored how, even after a very bad month, that region is still outperforming other regions in new homebuilding. Excerpts follow the jump (bolds and numbered tags are mine):


Initial Unemployment Claims (071714): 302K SA Claims; Raw Claims Down 10% from Same Week Last Year

Filed under: Economy,Taxes & Government — Tom @ 8:29 am


The report will be here at 8:30.

HERE IT IS (permanent link):


In the week ending July 12, the advance figure for seasonally adjusted initial claims was 302,000, a decrease of 3,000 from the previous week’s revised level. The previous week’s level was revised up by 1,000 from 304,000 to 305,000. The 4-week moving average was 309,000, a decrease of 3,000 from the previous week’s revised average. This is the lowest level for this average since June 2, 2007 when it was 307,500. The previous week’s average was revised up by 500 from 311,500 to 312,000.


The advance number of actual initial claims under state programs, unadjusted, totaled 369,591 in the week ending July 12, an increase of 47,079 (or 14.6 percent) from the previous week. The seasonal factors had expected an increase of 49,945 (or 15.5 percent) from the previous week. There were 410,974 initial claims in the comparable week in 2013.

The seasonal adjustment factors took care of what is apparently a normal uptick in raw claims during the first full week after the July 4 holiday.

Whether it was just a one-time uptick is something we’ll have to see next week.

July 16, 2014

Producer Price Increases Exceed Expectations, Factory Output Trails Them

Filed under: Economy,Taxes & Government — Tom @ 9:47 am

Producer prices went up a seasonally adjusted 0.4 percent in June. The prediction was for 0.2 percent.

Producer prices went up a seasonally adjusted 0.8 percent during the quarter (+0.6 in April, -0.2 in May). If we see a similar result with consumer prices, it would seem to imply that the GDP inflator in the second quarter’s GDP calculation needs to be in the neighborhood of an annualized 3.0 percent — far higher than what we’ve seen in previous quarters.


Update, 10:00 a.m.: Given that much of what may have been bought or consumed in the second quarter would have been produced in prior quarters, there’s justification for a lower GDP deflator than just indicated. But it seems like it should be higher than the 1.3 percent or so we’ve typically seen in previous quarters.


Meanwhile, industrial production, expected to rise by 0.3 percent, rose by 0.2 percent.

If anyone can tell me why the Fed is correct when it says that industrial production “advanced at an annual rate of 5.5 percent for the second quarter of 2014,” let me know. I think it’s a typo, and that the increase is really 2.5 percent. No change in April, +0.5 in May, and +0.2 in June could lead to a 2.5 percent result; it can’t possibly lead to +5.5 percent.

That quarterly increase of 0.7 percent (0.5 plus 0.2) is less than half of the 1.6 percent revised increase seen during the first quarter, and we know (at least until the July 30 revision) that the far better number occurred during a quarter of GDP contraction.

Manufacturing output increased by only 0.1 percent.

Zero Hedge logically asks:

Does this look like a Q2 recovery bounce that is strong and supportive of 3% GDP growth?

No it doesn’t. Not at all.

Fever-Swamp Left Celebrates How CNBC’s Steve Liesman ‘Embarrassed’ Rick Santelli; No He Didn’t

Paul Krugman at the New York Times and other fever-swamp leftists who, incredibly, are operating under the assumption that the economy has experienced an acceptable if uneven “recovery” during the five years since the recession ended are celebrating what they believe was an epic live “embarrassment” of Rick Santelli at the hands of Steve Liesman at CNBC on Monday.

A Google search shows that Mediaite (“CNBC Reporter Torches Rick Santelli”), New Republic (“CNBC’s Rick Santelli Was Embarrassed on Live TV”), Talking Points Memo (“Watch CNBC’s Tea Partier Get Told How Wrong He’s Been”), Business Insider (“Steve Liesman Issued A Devastating Line To Rick Santelli”), and of course Vox (“Watch Steve Liesman demolish Rick Santelli’s inflation fearmongering”) are all piling on. Following the jump, I will show that Santelli only claimed to have been right about the direction of the economy for the past five years, after which Liesman changed the subject and hogged the microphone:


July 15, 2014

Retail Sales Disappoint … Again

Filed under: Economy,Taxes & Government — Tom @ 9:15 am

From the Census Bureau:

The U.S. Census Bureau announced today that advance estimates of U.S. retail and food services sales for June, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $439.9 billion, an increase of 0.2 percent (±0.5)* from the previous month, and 4.3 percent (±0.9) above June 2013. Total sales for the April through June 2014 period were up 4.5 percent (±0.7) from the same period a year ago. The April to May 2014 percent change was revised from +0.3 percent (±0.5)* to +0.5 percent (±0.2).

Before rounding, the increase was 0.245 percent, if that makes anyone feel better.

Expectations were for a 0.6 percent gain. The May upward revision provides some solace, but not much.

The raw (undadjusted) May-June decrease was 5.59 perent. The May-June decrease in 2013 was 5.07 percent. Perhaps that can be explained away by noting that June 2013 had 10 weekend days and June 2014 had nine. I don’t the GDP calculations care about that.

It looks like if second-quarter GDP is going to be decent, significant contributors are going to have to come from somewhere besides personal consumption expenditures.


July 14, 2014

AP Posts 500-Word Story on School Lunch Foods Controversy, Fails to Mention Michelle Obama or the White House

Michelle Obama’s name must really be mud in the school nutrition community these days.

I had to do a double-take when I read today’s coverage of the School Nutrition Association’s Annual Conference in Boston by Philip Marcelo at the Associated Press today. What Marcelo hid from the nation is that the SNA didn’t want Michelle Obama or anyone else from the White House anywhere near their conference.


July 13, 2014

Salon Author: Let’s Make Google, Amazon and Facebook ‘Public Utilities’

Richard (RJ) Eskow, ”a writer, consultant, and Senior Fellow at the Campaign for America’s Future,” is a certified “respectable” lefty. So as much as the idea which follows may seem laughable, it shouldn’t be dismissed as the unhinged rant of someone with no influence engaging in some isolated “thought experiment” which isn’t shared by others in leftyland.

Eskow, in a Tuesday column at Salon, advocated regulating Internet titans Google, Amazon and Facebook as “public utilities.” His justification is that they “define our lives,” they’re “close to monopolies,” and besides, employing a breezy myth still held by many in the press, “Big Tech was created with publicly developed technology.” Read on (the headline overstates Eskow’s position; bolds are mine):


July 12, 2014

AP’s Taylor Swallows Administration’s Absurd 2014 Full-Year Growth Estimate

At the Associated Press on Friday afternoon, Andrew Taylor, who it should be noted covers Congress and is not routinely on the economics or business beat, relayed an Obama administration prediction that economic growth in 2014 will come in at 2.6 percent.

Taylor noted that this estimate, lowered from 3.3 percent, came about because of “the unexpected 2.9 percent drop in gross domestic product in the first quarter of this year when unusually severe weather dinged the economy.” Besides failing to note that the contraction was an annualized drop (the actual contraction was about 0.7 percent), he didn’t tell readers how absurdly strong growth will have to be during the rest of the year to hit that 2.6 percent target; it works out to an annualized 4.5 percent during each of this year’s remaining unreported quarters. Perhaps the AP reporter isn’t economically astute enough to recognize how unlikely that is — or worse, he recognized it and let it pass unchallenged.


‘Who Do You Think You’re Fooling?’ Passage of the Day

Filed under: Economy,Quotes, Etc. of the Day — Tom @ 6:09 pm

As a decided funk settles in five years after the recession’s official end, inconvenient data disappears:

Slowing Customer Traffic Worries U.S. Retailers

… Near-term trends aside, store chains across the retailing industry are wrestling with what could be a permanent decline in shopper visits. Customers now use their mobile phones and computers to compare promotions, prices and products before heading into a physical store to buy clothes, electronics and increasingly, groceries.

… “Shoppers are making targeted visits to malls and going into fewer stores,” said Christopher Ainsley, CEO of ShopperTrak, a Chicago-based data firm that records store visits for retailers using tracking devices installed at 40,000 outlets in the U.S.

ShopperTrak is changing the way it presents its data, as mall owners and retailers come to terms with declining store visits. In reaction to feedback from the retailers ShopperTrak serves, the firm said starting July 17 it would quit reporting results from individual malls and instead report the tallies by ZIP Code.

The firm said its customers wanted a way to understand what was happening in the broader area as opposed to just at individual malls.

Man, is it getting deep in here.

ShopperTrak’s customers — i.e., individual malls — don’t want the world to see how pathetic their traffic results are. They will still get their individual mall data; they just don’t want the public to see it.