For those who may have missed our blog, past weeks, just a friendly reminder – the US economy didn’t going anywhere, H1.
We will see advanced Q2 GDP this week, with GDP revisions back to 1999; if Q2 breaks much through 2% it will be a miracle. Amazingly, there are still many out there who believe that weather was the main culprit, Q1 (-2.9%) and that we are in for a major bounce, Q2. Poor little darlings.
We find from last Friday’s June Durables print that non-defense capital goods shipments, ex-aircraft - the measure used for calculating equipment spending - fell 1% in June, fell 0.1% in May (R from +0.4%) and fell 0.3% in April. Capital goods shipments were supposed to be part of the “big bounce” in Q2 GDP. Nope.
We suffer under a “progressive” administration and now we have a “progressive” as Fed chair. There is no sanity in that.
As a direct result, corporate risk takers are simply not “taking” any. That means non-residential fixed investment will increase about half of what most expect, H1.
We will witness the June Payroll release this Friday. May headline figures looked to be buoyant, misleading many observers. Come on now. About 70% of new jobs created year-to-date have been voluntary part time jobs. These don’t carry much horsepower for goodness sake.
Our problem is that for the time being at least, we cannot translate macro insight to the bottom line. This is because in the fixed income markets, central banks are now seen as governors (of the lawn mower variety).
The distortions triggered by an activist Fed chair will continue to act as a retardant. We may have seen the best from this recovery.
Robert Craven
We will see advanced Q2 GDP this week, with GDP revisions back to 1999; if Q2 breaks much through 2% it will be a miracle. Amazingly, there are still many out there who believe that weather was the main culprit, Q1 (-2.9%) and that we are in for a major bounce, Q2. Poor little darlings.
We find from last Friday’s June Durables print that non-defense capital goods shipments, ex-aircraft - the measure used for calculating equipment spending - fell 1% in June, fell 0.1% in May (R from +0.4%) and fell 0.3% in April. Capital goods shipments were supposed to be part of the “big bounce” in Q2 GDP. Nope.
We suffer under a “progressive” administration and now we have a “progressive” as Fed chair. There is no sanity in that.
As a direct result, corporate risk takers are simply not “taking” any. That means non-residential fixed investment will increase about half of what most expect, H1.
We will witness the June Payroll release this Friday. May headline figures looked to be buoyant, misleading many observers. Come on now. About 70% of new jobs created year-to-date have been voluntary part time jobs. These don’t carry much horsepower for goodness sake.
Our problem is that for the time being at least, we cannot translate macro insight to the bottom line. This is because in the fixed income markets, central banks are now seen as governors (of the lawn mower variety).
The distortions triggered by an activist Fed chair will continue to act as a retardant. We may have seen the best from this recovery.
Robert Craven
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