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August 5, 2016
Don't Be Fooled Today's strong jobs report will naturally give credence to the economic bulls temporarily, but don't be fooled, this report is a continuation of a slowing job market.The economy actually lost 1 million (-1.03mm) jobs in July, but the seasonal adjustment brought that back into the positive; to +255 thousand. Seasonal adjustments are valid a... read more
June 20, 2016
Brexit, Another Y2K? Robert Kessler quoted in Barron's.
April 28, 2016
Output Gap Update - Q1 2016 [Single left-click on image to enlarge]Among our favorite indicators to write about is the GDP output gap. Today we update it with the latest Q1 2016 GDP data. We've written about it many times in the pas... read more
February 26, 2016
Mind the business cycle, part 2 Counter-intuitively, the recent increases in core inflation are normal in the sequence of how a recession evolves. The typical business-cycle sequence is that the manufacturing sector weakens first, then employment and consumer spending, and lastly, inflation. In fact, it is often not until the recession is over that... read more
January 21, 2016
A Simple Warning We like to consider the longest time periods available to find reliable historical trends in data series. Of these, the price/earnings ratio (p/e ratio) of the S&P 500 index is instructive to study. Major bull markets in equities tend to start from heavily disfavored markets; those with earnings multiples (p/e ratios) in the single digits.... read more
December 31, 2015
Mind the business cycle As regular readers know, we spend a lot of time on the business cycle because its existence is one of only a handful of things we can count on with economics (right under the proverbial death and taxes), and interest rates surely follow it. Economies expand and then economies contract; this we know since biblical times. But more th... read more

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