US Industrial Output Tumbles In May
US industrial activity slumped 0.4% in May, well below expectations. The monthly decline reverses April’s bounce and throws cold water on the notion that output was heading toward a summer revival. The manufacturing component fell, too, posting a 0.4% drop that pushed this slice of output into the red in year-over-year terms for the first time this year, according to this morning’s update from the Federal Reserve.
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No Sign Of A Rate Hike Today Via The 10-Year Treasury Yield
The benchmark 10-year Treasury yield yesterday remained at its lowest level since late-2012, according to daily data published by Treasury.gov through June 14. For the second consecutive day, this widely followed rate held at 1.62%–more than 60 basis points below the level at the start of the year. The implication: the bond market is expecting that the Federal Reserve will leave interest rates unchanged in today’s FOMC meeting—and perhaps for months to come.
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Initial Guidance | 15 June 2016
US Retail Sales Up A Solid 0.5% In May
Retail spending in the US rose 0.5% in May, the Census Bureau reports–a bit better than economists expected. The gain marks a sharp downshift from April’s 1.3% bounce. But April’s unusually strong advance isn’t sustainable and so it’s no great tragedy that today’s report is weaker by comparison. Overall, looking at the last two monthly increases suggests that there’s still a healthy glow for retail sales. A less-encouraging profile emerges, however, when we focus on the year-over-year trend, which is probably more reliable for analyzing the appetite for spending.
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Considering Annual Changes For Projecting GDP
No one would characterize GDP forecasting as easy. Some might call it worthless. But to the extent that we crunch these numbers, it’s useful to note that there are many ways to slice and dice. Not surprisingly, results vary–sometimes by a lot. Among the various knives in this drawer is one with the potential to minimize the noise via modeling GDP changes on a year-over-year basis. It’s flawed, of course, like every other effort at divining the future. But the underlying methodology has a certain appeal, as I’ll discuss. And maybe, just maybe, its flaws are less egregious vs. the usual suspects that attract so much attention in the GDP prediction game.
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Initial Guidance | 14 June 2016
Broadly Defined Commodities Rise For Fifth Straight Week
The rebound in commodities rolled on last week, delivering the biggest return for the five trading days through June 10 among the major asset classes, based on a set of exchanged-traded products. For the fifth consecutive week, the iPath Bloomberg Commodity ETN (DJP) posted a gain, rising 2.3%.
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Initial Guidance | 13 June 2016
Book Bits |11 June 2016
● The Inevitable: Understanding the 12 Technological Forces That Will Shape Our Future
By Kevin Kelly
Review via TechDirt
Kevin Kelly, whose bio always notes that he “helped launch Wired Magazine,” is one of those people who always makes you think. I enjoy his writing and insights into technology more than just about anyone else. So it’s exciting to see his new book out, entitled The Inevitable: Understanding the 12 Technological Forces That Will Shape Our Future. This isn’t a book about making specific predictions about this or that technology, but rather an attempt to look at specific larger trends that Kelly believes are “inevitable.” From there, you can start to think about what it would mean for technology, life, work and much, much more.
For anyone interested in the things we talk about here: the intersection of technology, economics, business and policy, I’d put this one on the must read list.
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