There’s a popular saying that stocks climb a wall of worry. But one could also say that bonds also climb a wall of worry. A wall of worry over inflation. For years (really decades), there have been persistent fears of surging inflation. And those fears just never come to fruition. That doesn’t mean they can’t… Read More
The recent decline in the series is consistent with a moderation in inventory investment in the current quarter, and hence a decline in the contribution from inventory investment to real GDP growth. A simple regression of quarterly inventory investment on our indicator [R-squared = 0.8] suggests that inventory accumulation could fall by $34 billion in Q4 ($135 billion at an annual rate) to $27 billion, enough to detract roughly a full percentage point from Q4 real GDP growth if taken at face value.
The ISI Tech Company Index (see discussion) shows continuing weakness. The survey, which is heavily weighted towards US semiconductor firms, is now at the lows of 2008/09. It seems that firms have been postponing spending on equipment and to a lesser degree on software. The obvious explanation is the uncertainty in Washington.
Rail traffic continues to be a bright spot in the US economy though growth has definitely slowed some in recent months. This week’s traffic trends showed a rise in intermodal traffic at a 2.4% year over year rate. That brings the 3 month average to 2.35%. I think this data is one of many indicators… Read More
More of the same here. Rail traffic is still expanding, but showing definite signs of sluggishness. This week’s reading of 1.9% brought the 3 month average to 2.6% growth. That’s certainly in-line with the growing, but very sluggish economy. Here’s more from the AAR: “The Association of American Railroads (AAR) today reported mixed weekly rail… Read More
The October reading from the Euro-Coin index, a private expansion/contraction model developed by CEPR, is still pointing towards contraction across Europe. The latest reading of -0.29 is slightly improved from the September reading of -0.32, but still contracting. The recent readings are the worst since 2009 and consistent with the view that Europe remains mired… Read More