Economists Barry Eichengreen and Kevin O’Rourke have been comparing the downturn in the 1930s to the recent macro debacle in charts and words and offer a fresh update. The quick summary is that we’re doing better in the 21st century, but the recovery seems to be struggling. “While industrial production and trade recovered much more quickly than during the Great Depression,” they write, “both series now appear to be slowing down.” What does it mean? “It suggests that, as St Augustine would have said had he been managing director of the IMF, there is a case for additional fiscal consolidation and monetary normalisation, but not yet.”
Small Business Job Growth Slows In February, Intuit Reports
This week brings updates on three employment reports, and the first one arrived yesterday. The Intuit Small Business Index rose in February, the payrolls firm Intuit advises. “Job creation among small businesses continued in February, albeit slowly,” the firm says in a press release. “This slow growth was accompanied by a small uptick in compensation and a slight decrease in hours worked.”
Will The ISM Services Sector Index’s Feb Rise Spill Over To Friday’s Jobs Report?
The services sector, which dominates the U.S. economy relative to manufacturing, grew at a modestly faster pace in February, the Institute for Supply Management reports. The ISM non-manufacturing index rose to 57.3 from 56.8 in January, reaching the highest level since March 2011. Any reading above 50 equates with economic growth and so higher levels imply a strengthening expansion. Today’s news is clearly another reason to remain optimistic, although this is hardly an all-clear signal that blows away other risk factors. Nonetheless, the services sector overall employs most of the labor force in the U.S. and so we have another data point for thinking positively about Friday’s jobs report.
Debating (And Misreading) Milton Friedman’s Legacy For Monetary Policy
Amity Shlaes, author of The Forgotten Man: A New History of the Great Depression
Book Bits For Saturday: 3.3.2012
● The Escape Artists: How Obama’s Team Fumbled the Recovery
By Noam Scheiber
Review via Slate
The moment when the economy seems to be turning around is perhaps not the best time to publish a book explaining why it took so long to get things right. Still, with his new book, The Escape Artists: How Obama’s Team Fumbled the Recovery, Noam Scheiber offers a persuasive take on administration policymaking, one in which there are no heroes and no villains, no fools, no saints, not even a clear road not taken. It’s a portrait of a team that failed in its responsibility to the country to avoid a prolonged and cataclysmic downturn, but did so under extremely trying circumstances—and still, arguably, produced the best possible result.
Strategic Briefing | 3.2.12 | Crude Oil Imports
US crude oil imports fall to 12-year low
Financial Times | Mar 1
US crude imports have fallen to their lowest level for a decade as a result of weak demand and growth in domestic production, making the economy more resilient to oil price rises. The US imported 8.91m barrels a day of crude oil last year, according to the US Energy Information Administration, the lowest amount since 1999.
ISM Index: Manufacturing Activity Cools A Bit In February
The modest retreat in the ISM manufacturing index for February may be nothing more than monthly noise, although a fall in this benchmark certainly won’t help sentiment after this morning’s disappointing news for personal income and spending in January. The Institute for Supply Management’s factory index slipped to 52.4 last month, down from January’s 54.1 reading. That’s hardly fatal, but it’s definitely not helpful, particularly today. In any case, it’s something of a surprise: Economists were expecting a rise, according to Bloomberg.
Slowing Income & Spending Levels Cloud Economic Outlook
Consumer income and spending eked out gains last month, although the increases aren’t enough to dispel doubts about the strength and staying power of economic growth. But initial jobless claims are still holding at the lowest levels in four years and so there’s still hope that the cyclical demons can be held off. The critical variable remains the labor market, and the ability of job growth to keep wages growing, which in turn will help keep the pace of income and spending from falling further. The good news is that wage growth rolls on, and so the case for optimism is far from hopeless. But energy prices rising and fears of a fresh round of Middle East turmoil, there’s precious little room for disappointment in the economic reports in the weeks ahead.
Major Asset Classes | Feb 29, 2012 | Performance Update
February was a mixed bag of returns for the major asset classes, but that didn’t stop the Global Market Index (GMI) from rising again. Thanks to another strong month of gains in the global equity markets, the passive, unmanaged GMI, which holds all the major asset classes in market-value weights, posted a healthy 2.8% rise in February—it’s third monthly increase in a row.
The Beta Investment Report | US Equity Funds (Broad) | 2.29.12
The world is awash in ETF and mutual fund research, newsletters, and commentary from every conceivable angle. But the world needs one analytical effort in this corner, albeit with a specific focus. What’s been missing is a regular update of low-cost, index fund proxies of the major asset classes. For strategic-minded investors looking to build and manage multi-asset class portfolios, the choices are overwhelming. Yes, there are many, many possibilities for combing through the list. But for those of us who want a short list that cuts to the chase, the menu of options is limited for finding good choices fast. With that in mind, today I’m launching a semi-regular series of updates on the short list of products within a given asset class, beginning with broad-minded U.S. equity funds.