Tuesday, June 28, 2011
The good news is that the recent weakness in consumer spending was mostly in durable goods consumption, especially in auto sales, and probably temporary. Over the past three months, outlays on durable goods rose just 0.8% (saar), the weakest since the start of 2010. The spike in gasoline prices during the spring certainly depressed such sales. The shortage of autos attributable to Japan’s earthquake also dampened sales. The outlook for auto sales in coming months is improving as gasoline prices fall and auto production rebounds.
Let’s not get too excited. There are a number of chronic problems that will continue to weigh on consumers for a while. The labor market remains challenging. There is plenty of deleveraging ahead. Home prices are still falling. Income inequality is widening. So while durable goods spending should rebound during the second half of the year, the pace of overall spending may remain subdued as evidenced by the lackluster growth rates over the past three months of 1.3% (saar) in real nondurable goods and 1.6% in real services, based on three-month averages.
Sunday, June 26, 2011
Tuesday, June 21, 2011
Japan’s crude oil demand was especially weak following the recent earthquake and tsunami. The latest data also show some “demand destruction” in the US and in Europe.
Sunday, June 19, 2011
Wednesday, June 15, 2011
Monday, June 13, 2011
The soft patch may not be so soft after all, at least not in
There is a strong correlation between
Thursday, June 9, 2011
Wednesday, June 8, 2011
Tuesday, June 7, 2011
The other S-PMIs all declined during May, but remained in expansion mode with readings above 50: France (58.7), Germany (56.9), Eurozone (55.3), US (54.1), UK (52.9), and Italy (51.5).
Monday, June 6, 2011
Wednesday, June 1, 2011