u.s. slack keeps shrinking, slowed but not stopped by global … · 2018-01-08 · hfe global...

www.hifreqecon.com/WebinarSept2016

U.S. Slack Keeps Shrinking, Slowed But Not Stopped By Global Headwinds; Case For Fed Tightening BuildsJim O’Sullivan, Chief U.S. Economist

QE To End, Bond Yields To Rise: Just What The G-7 Does Not Need For The End Of 2016!Carl Weinberg, Chief Economist


HFE Global Webinar — September 28, 2016 Jim O’Sullivan, Chief U.S. Economist

Daily Notes on the United States

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1961-69 1970-73 1975-80 1980-81 1982-90 1991-2001 2001-07 2009- Change In Unemployment Rate From Peak During Recoveries, Percentage Points

Quarters After Peak

Current Cycle

1b. …Yet Unemployment Rate Has Generally Declined Rapidly

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1961-69 1970-73 1975-80 1980-81 1982-90 1991-2001 2001-07 2009- Real GDP During Recoveries, Trough=100

Quarters After Trough

Current Cycle

1a. GDP Growth Has Been Weak By Past Standards




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ECI: Private Sector Wages Per Hour, %chya ECI: Private Sector Wages Per Hour, Ex Incentive-Paid Occupations, %chya Employment Report: Average Hourly Earnings, %chya Atlanta Fed Per-Hour Wage Tracker, %chya

2b. Wage-Rate Measures Have Started To Accelerate

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Core CPI Core PCE Cleveland Fed Median CPI Atlanta Fed Sticky CPI Cleveland Fed Trimmed-Median CPI Dallas Fed Trimmed-Mean PCE

% Change In Price Index From 12 Months Earlier

Fed Goal For PCE Prices

Core PCE

2a. Core Inflation Measures Have Drifted Up in The Past Year




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Actual Reported Rate Mid-Point Of Fed Projections, As Of Nov 2011 Mid-Point Of Fed Projections, As Of Sep 2013 Mid-Point Of Fed Projections, As Of Sep 2014 Median Of Fed Projections, As Of Sep 2015 Median Of Fed Projections, As Of Sep 2016

Unemployment Rate, %

Median Fed Estimate For Longer-Run Normal Unemployment Rate: 4.8%

3. Unemployment Rate Has Been Close To Flat Recently—Just A Pause?




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Labor Force Participation Rate, %

Shaded Bars Denote Recession Periods

4b. Participation Rate Is Up A Little

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Household Survey Employment, Break-Adjusted, %chya Labor Force, Break-Adjusted, %chya Payrolls, Excluding Temporary Census Hiring, %chya

Shaded Bar Denotes Recession Period

4a. Labor Force Growth Has Almost Caught Up With Jobs Growth




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Unemployment Rate, % (Left) NFIB Survey: Net % With Hard-To-Fill Job Openings (Inverted, Right)


5b. “Hard To Fill” Vacancies (Plotted Inversely) Have Been Rising

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Conference Board Job Market Assessment, % Plentiful Minus % Hard To Get (Left) Unemployment Rate, % (Right)

5a. Downtrend In Unemployment Rate Resuming?




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Reported Payrolls, Ex-Census Effects Model Estimate Based On ISM Employment Indexes


Change, Thousands Per Month, 3-Month Average

6b. ISM Data Have Not Been Reliable For Payrolls Recently

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Jobless Claims, 000s Per Week (Left, Inverted) Composite ISM Index (Right)


6a. Mixed Signals From Jobless Claims And ISM Data




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Fed's Nominal Broad Trade-Weighted Dollar Index, Jan 1997 = 100

7b. The Dollar’s Uptrend Has At Least Paused

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Manufacturing ISM Export Orders Index (Left) Real Good Exports, %ch From 6 Months Ago In 3-Month Avg, Annual Rate (Right)

1998

7a. August Weakening In Mfg ISM Index Not Due To Exports




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Michigan Sentiment Index (Left) Conference Board Confidence Index (Right)

1998 Market Turmoil


Debt-Limit Scare

Govt Shutdown

8b. Consumer Confidence Measures Have Generally Held Firm

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Overall CEO Outlook Index (Left) Net % Planning To Raise Capex In Next 6 Months (Right)


Business Roundtable CEO Survey

8a. Biz Confidence Is Subdued, But No Sign Of Sudden Drop




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10-Year Treasury Yield, % (Left) S&P 500, Log Scale (Right) Bars Denote Fed Tightening Periods

9b. Markets Have Varied During Fed Tightening Cycles

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10-Year Term Premium*, % Nominal 10-Year Treasury Yield, % 10-Year Risk-Neutral Yield*, %

*NY Fed data; methodology developed by Tobias Adrian, Richard Crump & Emanuel Moench.

“Bond Market Conundrum”

Shaded Bars Mark Fed Tightening Periods

9a. Term Premiums In The Bond Market Are Historically Low

Carl B. Weinberg, Chief Economist


HFE Global Webinar — September 28, 2016

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IMF Measure Of World Trade Value, Billions Of U.S. Dollars

Monthly Data Through June 2016

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World Exports In U.S. Dollars, Percent Change Year Ago, Right Axis World GDP, Percent Change Year Ago, Left Axis

Yearly World Trade And GDP Data Through 2015

IMF Measure Of World Trade Value Vs GDP Growth




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IMF Measure Of World Trade Volume, Percent Change Year Ago

Blue Line Is World Trade Volume In U.S. Dollars, Black Line Is Three-Month Moving Average Green Line Shows HFE Index Of G-7 + China Industrial Output To July 16




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Japan: BoJ Holdings Of JGBs And JGTBs

As A Percentage Of Central Government Debt Issuance, Monthly Data To August 2016

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Japan: Industrial Production Index

Seasonally Adjusted Monthly Index, 2010 = 100

Industrial Output Still 17.7% Below 2008 Pre-Crash Peak And Reduced To 1988 Levels

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30-Day 60-Day 90-Day 1-Year 2-Year 5-Year 10-Year 20-Year 30-Year

September 23, 2016

September 16, 2016

Japan Sovereign Yield Curve — Recent Changes

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Census Benchmark In 2010 Distorts Trend

Japan: Population, Millions Of Persons




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Euro Zone: ECB Holdings Of Sovereign Bonds

As A Percentage Of Central Government Debt Issuance, Quarterly Data To Sep 2016*

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Euro Zone: Exports, Percent Change Year Ago

Yellow Line Shows Five-Month Moving Average

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Euro Zone: Industrial Production Index

Seasonally Adjusted, 2010 = 100, Trend Since 2011 Drawn

Still Well Below 2008 Pre-Depression Highs!

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Total MFI Lending Lending To SMEs Ex-Mortgages

Euro Zone: Bank Lending, Percent Change Year Ago




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United Kingdom: BoE Holdings Of Gilts In The APF

As A Percentage Of Total Gilt Issuance, Monthly Data To August 2016

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United Kingdom: Current Account Balance, £Billions

Quarterly Rate, Line Shows Four-Quarter Moving Average

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Sales Volumes, %chya (To Aug 16, Right Axis) CBI Index Of Retail Sales (Left Axis)

United Kingdom: CBI Index And Retail Sales Volumes

VAT Rate Distortions

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M4 Total

M4 Lending

United Kingdom: Broad Money Supply M4 And Lending

Billions Of Pounds Sterling




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Monthly Change China: FX Reserves, Billions Of U.S. Dollars

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China: Retail Sales, Percent Change Year Ago

Green Line Shows CPI-Adjusted Sales

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Overall Credit Intensity In GDP Ratio Credit Intensity In GDP Ex-SOBs Credit Intensity In National Income Ex-SOBs

China: Credit Intensity In GDP Or GNI, Three Measures

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Change In FX Reserves Current Account Balance FDI Capital Flow (Positive Is Outflow)

China: Quarterly Balance Of Payments, Billions Of Dollars

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China: Trade Balance, Seasonally Adjusted, RMB Billions

Black Line Is 12-Month Moving Average




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Yearly National Income* Growth 10-Year Average (Demonstrated Potential)

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China: Yearly GNI* Growth Rate, Percent

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Yearly GDP Growth 10-Year Average (Demonstrated Potential) GDP Growth

China: Yearly GDP Growth Rate, Percent

u.s. slack keeps shrinking, slowed but not stopped by global … · 2018-01-08 · hfe global...

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