May was a rough month for financial and commodity markets—the worst, in fact, since September 2011. Most of the major asset classes slumped last month. The main exception: U.S. Treasuries, which buoyed the Barclays Aggregate Bond Index. Inflation-indexed Treasuries in particular performed handsomely, jumping 1.7% in May. Otherwise, red ink in varying degrees dominated.
Slow Growth Still Prevails In The Labor Market
Today’s updates on weekly unemployment claims and ADP’s estimate of private sector payrolls for May suggests that the labor market continues to grow. The expansion is modest and perhaps vulnerable to the ongoing turmoil linked to the euro crisis, and it’s not likely to impress analysts, but the growth rolls on.
Strategic Briefing | 5.31.12 | Will Spain Leave The Euro?
Spain bank fears send bond yields to euro-era high
Associated Press | May 30
Investors worried about the viability of Spain’s banks sent the country’s borrowing costs into the danger zone Wednesday and pummeled European stocks, spooked about whether the Spanish government can pay for a bailout of a banking sector saddled with toxic loans and piles of foreclosed property born from a decade-long building frenzy.
Growth Rates & Government Spending
How fast is the federal government’s spending rising? It’s a politically charged question these days, of course, and so there’s an excess of spin attached to the discussion of government budgets at the moment. Fortunately, the offending numbers are easily located and dissected, courtesy of the Congressional Budget Office’s “Budget and Economic Outlook: Fiscal Years 2012 to 2022” report (specifically: the historical data in tables F-1 and F-3). The results may enrage or inspire you, depending on your political persuasion and budgetary assumptions. But the first intelligent step in any debate is to take a sober look at the data, assuming it’s available. Oh, yes, one other necessary condition for informed analysis: no screaming, please.
A Primer On Minimizing Uncertainty In Retirement Planning
Successful retirement planning requires intelligent investing decisions, but that’s just one of several critical factors for managing your assets after you stop working, reminds Moshe Milevsky in his new book The 7 Most Important Equations for Your Retirement: The Fascinating People and Ideas Behind Planning Your Retirement Income
Book Bits | 5.26.2012
● The New Geography of Jobs
By Enrico Bonetti
Q&A with author via Forbes
Q: What is the New Geography of Jobs?
A: If you look at the economic map of America today, you do not see just one country. You see three increasingly different countries. On one hand there are cities like Seattle, San Francisco, Raleigh-Durham or Austin, with a strong innovation-based economy and workers who are among the most creative and best paid on the planet. At the other extreme are former manufacturing centers like Detroit, Flint or Cleveland, where jobs and salaries are plummeting. In the middle, there is the rest of America, apparently undecided on which direction to take.The difference between the three Americas was small in the 1980’s and has been growing ever since. My book explores this new geography of jobs, and especially its root causes and what it means for our country.
Federal Spending As A Share Of The Economy
In a previous post, I reviewed Rex Nutting’s report that the “Obama spending binge never happened” by reviewing annual percentage changes in federal spending. The numbers support Nutting’s conclusion, but there are several ways of analyzing the federal budget and the results leave plenty of room for debate when it comes to summarizing the government’s fiscal rectitude, or the lack thereof. For example, another method of evaluating federal outlays is by looking at dollar amounts as a percentage of the economy (GDP). By this standard, the Obama administration is open to more criticism vs. comparisons based on the rate of change in spending.
Budget Battles & Reality Checks
Earlier this week, MarketWatch’s Rex Nutting wrote that the “Obama spending binge never happened” and that federal government outlays have recently been rising at the “slowest pace since 1950s.” The claim was quickly attacked by some commentators of the Republican persuasion as a left-wing conspiracy. The motivation for trying to discredit the report is understandable, at least from a raw political perspective. The notion that federal spending hasn’t exploded under Obama doesn’t jibe with the political playbook these days for the loyal opposition. But facts are still facts and so the frenzy of efforts to dismiss Nutter’s column don’t stand up based on the numbers.
April Was Another Weak Month For Durable Goods Orders
New orders for durable goods suffered another sluggish month in April, the Census Bureau reports. Although orders overall edged up last month by a slim 1.5%, the April report follows a sharp 3.7% fall in March. Nonetheless, last month’s slight gain was enough to boost the annual pace of new orders a bit vs. the previous annual reading. That’s hardly a game changer, but the gain at least leaves room for another month of debate about whether durable goods orders–a key leading indicator–are giving way to the dark side of the business cycle.
Is The Decline In New Jobless Claims Losing Momentum?
For the fourth time in as many weeks, today’s update on initial jobless claims shows that new unemployment filings are hugging the 370,000 neighborhood on a seasonally adjusted basis. The fact that claims aren’t rising is an encouraging sign, of course. But the resistance at the 370,000 level, if it rolls on, will raise more questions about the labor market’s capacity for growth.