Job openings in the U.S. rose to 3.4 million on the last business day of December, up from 3.1 million a month earlier, the Labor Department reports. “Although the number of job openings remained below the 4.4 million openings when the recession began in December 2007, the number of job openings has increased 39 percent since the end of the recession in June 2009,” according to the accompanying press release.
Quantifying Economic Policy Uncertainty
Is economic policy muddled? Some economists argue that confusion on the outlook for a range of policy fronts, such as regulation and tax policy, has been weighing on the economy. But how does one define policy uncertainty? A Stanford economist (Nicholas Bloom) and a Ph.D. candidate (Scott Baker) offer a possible solution with an attempt to quantify the concept in a new benchmark: Index of Economic Policy Uncertainty (EPU). According to the index’s latest data through January, U.S. policy uncertainty has fallen sharply.
Strategic Briefing | 2.7.2012 | Europe & Recession Risk
What’s next for Europe?
CNN | Feb 6
The European Central Bank has thrown cold water on the sovereign debt crisis by injecting billions of euros into the banking system, but the embers of the crisis are still smoldering. S&P says the eurozone has a 40% chance of entering a severe recession this year, with the economy projected to shrink by as much as 2%. Unless comprehensive reform creates a much tighter fiscal union, uncertainty will continue to cast a dark cloud over Europe’s economic future.
German Manufacturing Orders Rise
The Wall Street Journal | Feb 7
German manufacturing orders rose more than expected in December, driven by a surge in demand from outside the euro zone, in the latest sign that Europe’s largest economy may yet avoid recession despite the euro zone’s debt crisis. New orders rose 1.7% on the month in adjusted terms, after slumping by a downwardly revised 4.9% in November, data from the economics ministry showed Monday…. While German orders data are “very volatile”, the latest figures “seem to suggest that factory activity has not collapsed,” even after German economic growth moderated in the fourth quarter “as demand from abroad was hit by the global slowdown,” said Annalisa Piazza, a strategist at Newedge in London. “If anything, a slight pick-up is expected in the first quarter of 2012,” she said.
The Seasonal Factor & January’s Encouraging Employment Report
January’s payrolls report looks convincingly strong to many economists, but some skeptics warn that the seasonal adjustment in the first month of the year is usually quite hefty and so there’s less good news in the numbers than we’ve been told. That inspires looking at the unadjusted data on a year-over-year basis in search of clarity. But here too the results are encouraging.
Book Bits For Saturday: 2.4.2012
● The People’s Money: How Voters Will Balance the Budget and Eliminate the Federal Debt
By Scott Rasmussen
Interview with author via Newsmax
Independent pollster and political analyst Scott Rasmussen tells Newsmax that the real federal debt is $120 trillion — and he has a new book with proposals that could save the government more than $100 trillion over the coming decade.
Private Payrolls Post A Surprisingly Strong Gain In January
Today’s employment report from the U.S. Labor Department delivered a hefty blow against the idea that recession risk is high for the immediate future. Private nonfarm payrolls rose by a net 257,000 in January (total nonfarm payrolls rose by a slightly lower 243,000 because of a 14,000 decrease in the government’s workforce). That’s the strongest monthly increase for the private sector since last April and a tidy increase over December’s revised gain of 220,000. Economists overall had been expecting a considerably lower increase of well under 200,000 for private payrolls for January. But with today’s update in hand, it appears that job creation is accelerating in corporate America. Is this surprising? Not really. As I’ve been discussing for months, the falling trend in new weekly jobless claims has been signaling for some time that the labor market would continue to heal and perhaps grow at a moderately faster pace. Today’s jobs report certainly lends persuasive support for that view.
Jobless Claims Continue To Trend Lower
Reading this morning’s latest weekly update on jobless claims inspires the question: When will we see evidence that a new recession is here, or lurking in the near future? The answer: Not today. If there’s a clear sign that the economy’s set to tumble, it’s not obvious in last week’s new applications for unemployment benefits. In fact, this leading indicator continues to tell us that the labor market is slowly improving. New claims dropped by 12,000 to a seasonally adjusted 367,000 last week. One number doesn’t tell us much, of course, but it’s hard to dismiss the trend.
Gold Tricks In A New Bottle
Brett Arends of MarketWatch delivers a gentle profile of James Grant and his long-standing support for a return to the gold standard. Grant, who pens the newsletter Grant’s Interest Rate Observer, is among the metal’s leading promoters. He’s even been cited as a possible candidate to run the Federal Reserve. In that unlikely outcome, we certainly know how Grant would act. Arends quotes Grant as saying that the dollar’s value should be stable and unchanging, with the not-so-subtle implication that future crises would be averted with this policy.
Continued Improvement For Manufacturing Activity In January
January looked a bit better through the prism of the ISM manufacturing index, which rose again last month to 54.1 from December’s 53.1. That’s the third monthly increase in a row. Readings above 50 are generally interpreted as a sign that the economy is growing. It’s hardly a knock-out blow against analysts warning of high recession risk these days, but it’s clearly a step in the right direction. At this critical juncture for the global economy, anything that doesn’t bite us is a big help.
Major Asset Classes | Jan 31, 2012 | Performance Update
Last month was kind to risky assets. Indeed, there was no red ink in January for our broadly defined benchmarks of stocks, bonds, REITs and commodities. Ironically, cash (3-month T-bills) retreated ever so slightly on a monthly basis. Otherwise, the overall performance in this year’s first month was the best since last October, with the Global Market Index (a passive, market-value weighted mix of all the major asset classes) rising a robust 4.0% last month.