Economic News

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Ramrouser said:
Atlanta Federal Reserve is now predicting 4.6% economic growth in the 2nd quarter of this year. Pretty decent for an "idiotic" economic plan.
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1. It is not the Atlanta Federal Reserve. It is their GDP Now estimator, which they expressly disclaim as not being anything like an official forecast. It's just a real-time data aggregator, essentially. It's useful, though no longer because . . .

2. The model was not calibrated for a regime of wild economic uncertainty and volatility. We already saw that in 1Q, when GDP Now was predicting -2.5% growth but it had to be adjusted for an unusually large spike in gold transfers.

Well, if you peek into the GDP Now forecast, you'll see net exports are projected to grow 2.1% -- which accounts for most of that growth. Well, it's a good thing that we're exporting more, right? Except we aren't. That 2.1% figure is almost certainly about reduced imports from China. As we've seen, those reduced imports are not positively affecting the economy, but the damage won't show up in the May numbers. And there's an explicit assumption that personal expenditures are going to remain robust even though the net import story is telling a different tale.

Again, the tool was not calibrated to an exogenous shock like tariffs. Most models fail when there are exogenous shocks.
 
UNCatTech said:
Many seem to be missing the ripple effect of the uncertainty in business.

It's costing my company money.
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Obviously totally anecdotal but I am definitely starting to see ripples causing distress for corporate borrowers due to tariffs, hostility to green energy and related uncertainties… a noticeable uptick in calls from and about distressed borrowers this month.
 
nycfan said:
Obviously totally anecdotal but I am definitely starting to see ripples causing distress for corporate borrowers due to tariffs, hostility to green energy and related uncertainties… a noticeable uptick in calls from and about distressed borrowers this month.
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Yep.

You should be a leading economic indicator. Seriously. I mean, not you specifically but your field.
 
superrific said:
Yep.

You should be a leading economic indicator. Seriously. I mean, not you specifically but your field.
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I’ve had more serious conversations about Chapter 7 bankruptcy in the last 6 weeks than I had in the last several years. Chapter 11 comes up fairly regularly but it is unusual in my 25+ years to have Chapter 7 be in play this often. [For those unfamiliar, Chapter 11 generally is used to try to restructure a company to emerge from bankruptcy as a going concern (though it doesn’t always work out that way); Chapter 7 means skipping any restructuring and basically mailing the keys to the lender and wishing them best of luck liquidating the remaining assets. ]
 
nycfan said:
I’ve had more serious conversations about Chapter 7 bankruptcy in the last 6 weeks than I had in the last several years. Chapter 11 comes up fairly regularly but it is unusual in my 25+ years to have Chapter 7 be in play this often. [For those unfamiliar, Chapter 11 generally is used to try to restructure a company to emerge from bankruptcy as a going concern (though it doesn’t always work out that way); Chapter 7 means skipping any restructuring and basically mailing the keys to the lender and wishing them best of luck liquidating the remaining assets. ]
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Yeah, companies reliant on imports, especially small businesses with low margins, are just totally FUBAR right now.
 
nycfan said:
I’ve had more serious conversations about Chapter 7 bankruptcy in the last 6 weeks than I had in the last several years. Chapter 11 comes up fairly regularly but it is unusual in my 25+ years to have Chapter 7 be in play this often. [For those unfamiliar, Chapter 11 generally is used to try to restructure a company to emerge from bankruptcy as a going concern (though it doesn’t always work out that way); Chapter 7 means skipping any restructuring and basically mailing the keys to the lender and wishing them best of luck liquidating the remaining assets. ]
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Chapter 7? I guess you weren't involved in the Lehman bankruptcy? Oh who am I kidding -- every lawyer in NYC was involved with that bankruptcy in some fashion, LOL.

On a serious note: "inquiries about Chapter 7 with lawyers" definitely should be a leading indicator.
 
superrific said:
Chapter 7? I guess you weren't involved in the Lehman bankruptcy? Oh who am I kidding -- every lawyer in NYC was involved with that bankruptcy in some fashion, LOL.

On a serious note: "inquiries about Chapter 7 with lawyers" definitely should be a leading indicator.
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On the other hand, for those of us in Charlotte, this is the best news for the local business market in a long, long time.

 

Economists Raise Questions About Quality of U.S. Inflation Data​

Labor Department says staffing shortages reduced its ability to conduct its massive monthly survey​


🎁 —> https://www.wsj.com/economy/cpi-inf...e?st=cYzxqj&reflink=desktopwebshare_permalink

“Some economists are beginning to question the accuracy of recent U.S. inflation data after the federal government said staffing shortages hampered its ability to conduct a massive monthly survey.

The Bureau of Labor Statistics, the office that publishes the inflation rate, told outside economists this week that a hiring freeze at the agency was forcing the survey to cut back on the number of businesses where it checks prices. In last month’s inflation report, which examined prices in April, government statisticians had to use a less precise method for guessing price changes more extensively than they did in the past.

Economists say the staffing shortage raises questions about the quality of recent and coming inflation reports. There is no sign of an intentional effort to publish false or misleading statistics. But any problems with the data could have major implications for the economy.

To calculate the inflation rate, hundreds of government workers called enumerators fan out across cities each month to check how much businesses are charging for products such as blue jeans and services such as accounting, often by visiting bricks-and-mortar stores. Statisticians roll those figures together into the consumer-price index, a data stream that shows how the cost of living is changing for typical Americans.

If the government’s enumerators can’t track down a specific price in a given city, they try to make an educated guess based on a close substitute: say, cargo pants instead of slacks. But in April, with fewer workers on hand to check prices, statisticians had to base their guesses on less comparable products or other regions of the country—a process called different-cell imputation—much more often than usual, according to the BLS.…”
 
nycfan said:

Economists Raise Questions About Quality of U.S. Inflation Data​

Labor Department says staffing shortages reduced its ability to conduct its massive monthly survey​


🎁 —> https://www.wsj.com/economy/cpi-inf...e?st=cYzxqj&reflink=desktopwebshare_permalink

“Some economists are beginning to question the accuracy of recent U.S. inflation data after the federal government said staffing shortages hampered its ability to conduct a massive monthly survey.

The Bureau of Labor Statistics, the office that publishes the inflation rate, told outside economists this week that a hiring freeze at the agency was forcing the survey to cut back on the number of businesses where it checks prices. In last month’s inflation report, which examined prices in April, government statisticians had to use a less precise method for guessing price changes more extensively than they did in the past.

Economists say the staffing shortage raises questions about the quality of recent and coming inflation reports. There is no sign of an intentional effort to publish false or misleading statistics. But any problems with the data could have major implications for the economy.

To calculate the inflation rate, hundreds of government workers called enumerators fan out across cities each month to check how much businesses are charging for products such as blue jeans and services such as accounting, often by visiting bricks-and-mortar stores. Statisticians roll those figures together into the consumer-price index, a data stream that shows how the cost of living is changing for typical Americans.

If the government’s enumerators can’t track down a specific price in a given city, they try to make an educated guess based on a close substitute: say, cargo pants instead of slacks. But in April, with fewer workers on hand to check prices, statisticians had to base their guesses on less comparable products or other regions of the country—a process called different-cell imputation—much more often than usual, according to the BLS.…”
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Trump the Butcher: The first thing we do, let's kill all the statisticians.
 


“… New applications for jobless benefits rose by 8,000 to 247,000 for the week ending May 31, the Labor Department said Thursday. That’s the most since early October. Analysts had forecast 237,000 new applications.

Weekly applications for jobless benefits are considered representative of U.S. layoffs and have mostly bounced around a historically healthy range between 200,000 and 250,000 since COVID-19 throttled the economy five years ago, wiping out millions of jobs.

…
Earlier this week, the government reported that U.S. job openings rose unexpectedly in April, but other data suggested that Americans are less optimistic about the labor market.

Tuesday’s report showed that the number of Americans quitting their jobs — a sign of confidence in their prospects — fell, while layoffs ticked higher. And in another sign the job market has cooled from the hiring boom of 2021-2023, the Labor Department reported one job every unemployed person. As recently as December 2022, there were two vacancies for every jobless American.…”
 

Hiring Slowed in May, With 139,000 New Jobs​

Unemployment rate held steady at 4.2%​

🎁 —> https://www.wsj.com/economy/jobs/jo...7?st=2d477z&reflink=desktopwebshare_permalink


IMG_7251.jpeg
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Since ordinary revisions of job numbers became a political cudgel during the 2024 election, a footnote to the solid if not spectacular job report that nonetheless significantly beat expectations (125,000 expected):

“… The May payrolls number compared with a revised 147,000 jobs added in April. Revisions showed employers added a combined 95,000 fewer jobs in March and April than previously estimated.…”
 
nycfan said:

Hiring Slowed in May, With 139,000 New Jobs​

Unemployment rate held steady at 4.2%​

🎁 —> https://www.wsj.com/economy/jobs/jo...7?st=2d477z&reflink=desktopwebshare_permalink


IMG_7251.jpeg
IMG_7252.jpeg


Since ordinary revisions of job numbers became a political cudgel during the 2024 election, a footnote to the solid if not spectacular job report that nonetheless significantly beat expectations (125,000 expected):

“… The May payrolls number compared with a revised 147,000 jobs added in April. Revisions showed employers added a combined 95,000 fewer jobs in March and April than previously estimated.…”
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This is strange. I could have SWORN downward revisions only happened when Dems are in the White House.
 
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