Tuesday, April 29, 2008
10:00 AM Consumer Confidence (The Conference Board)
Consumer expectations fell sharply in the last three months, as the number of people with jobs declined. What was the continued fallout of a weak labor market on consumer attitudes?
Wednesday, April 30, 2008
8:30 AM Gross Domestic Product & Corporate Profits (1Q - 2008) (Bureau of Economic Analysis)
What is known is that hours worked declined by about 1 percent (annualized). If productivity growth was about 1 percent, GDP might have been unchanged in the first quarter. Less productivity, obviously, would mean a small decline. More productivity growth would imply a rise. The range of forecasts then is between a small negative change to as much as a 0.7 percent increase. The likely change was between 0-to-0.5 percent. Further, the implication from such slow growth is that profits declined for a third straight quarter. That has implications for investing and hiring this summer.
8:30 AM Employment Cost Index (Bureau of Labor Statistics)
This series showed a 0.8 percent rise in the fourth quarter of 2007, when GDP growth slipped below 1 percent (annualized). With overall economic growth no higher in the first quarter, this series likely produced another 0.6-to-0.8 percent rise. This is more evidence that the most important price - the price of labor - is not slowing even though the economy is weak and losing jobs.
10:00 AM Help-Wanted OnLine Data Series (The Conference Board)
The forward indicators of labor market activity have been pointing to continued weakness, perhaps through the summer. Did this change in the latest report on online activity?
Thursday, May 1, 2008
8:30 AM Personal Income and Outlays (Bureau of Economic Analysis)
Look for personal income to have risen a little faster (0.4-to-0.5 percent) than spending (0.2-to-0.3 percent). This is an important relationship. Nervous consumers are increasing spending more slowly than income. That won't change until consumer expectations perk up - perhaps not before the summer at the earliest.
Vehicle Sales
Consumer buying is weak all around. Despite low prices and low borrowing rates, vehicle sales were down to 15 million (annualized) in March and probably no higher in April. In fact, they are very likely to remain flat for an extended period. Consumer confidence would have to start recovering before vehicle sales perk up. Perhaps that sequence will help the 2009 models. This model year is more than half over already.
Friday, May 2, 2008
8:30 AM Employment Situation (Bureau of Labor Statistics)
There was a loss of 80,000 jobs in March. The April decline might have slowed to only 50,000-to-70,000 jobs. A decline of this magnitude (coming after losses in the first three months of the year) will continue to exert downward pressure on consumer confidence and spending. It further implies the second quarter began with no more momentum than the first quarter ended. That could mean another quarter of GDP growth below 1 percent and perhaps a fourth straight quarterly decline in profits.
Also important is that despite four straight monthly declines in jobs, average hourly wage rates were probably still running at a 3.6 percent rate (year over year).
Finally, also pay attention to the geographic differences. The Northeast and Midwest have been weaker than the rest of the country. The south is the new area of concern, tipping the overall economy into a period of very little growth (in output or jobs, and declines in profits).
The domestic economy is weak, but the global economy is losing momentum, pushing some other industrialized countries on to a relatively sluggish path. The Leading Economic Indicators for the U.K., for example, show as much weakness as in the U.S. over the past four months.
The data for Germany and Japan are even weaker — especially in the past two months. Moreover, the set of factors sapping strength are the same across the globe: higher energy prices and problems in the financial sector (especially in credit markets) are slowing down demand. One silver lining perhaps is that the weakness in Mexico did not persist: After declines in its index from November through January, it posted a 1.1 percent gain in February. That may be an indication that slower growth is here, not a headlong plunge into global recession.
