J: Three years ago, at the Q&A session after a presentation at the NABE policy conference*, former Federal Reserve Board Chairman Alan Greenspan (also a former NABE president) was asked for his outlook for the US economy for the next two years. His response was, “same old, same old.” Even though he was speaking during a quarter in which we now know that real GDP fell at a seasonally adjusted annual rate of 0.9 percent (remember, all quarterly numbers are seasonally adjusted at annual rates in this blog unless we say otherwise), his statement was remarkably prescient. [L: Economists would call that a good forecast.] In their GDP release of July 28, which contained revised data from 2014
The Census Bureau gave us the latest report on retail and food services sales on July 14. The chart shows the data and about all you can say about the first half of 2017 is “pretty flat.” Total retail and food services sales hit a record of $474.5 billion in April, seasonally adjusted (L: always is unless we say otherwise). They fell 0.1 percent in May from that level and another 0.2 percent in June. The June total of $473.5 billion was up 2.8 percent from June 2016. For the first half of 2017, total retail and food services sales were $2.8 trillion, up 3.9 percent from the same six months in 2016. The star performer continues to be “Nonstore retailers” (that’s Amazon and catalog sales).
L: Every month Jim fills out economic forecast forms for Bloomberg and The Wall Street Journal. There are also less-regular forecasting panels that he participates in, such as those for the National Association for Business Economics (NABE), the Philadelphia Fed, and the one that he has been seriously "hot" in lately, the Zillow® Home Price Expectations Survey. (He's won 4 Crystal Balls in the past 4 years for that one--how many crystal balls does a household need?) But I digress.... In their survey last month, the WSJ asked who might be picked to chair the Board of Governors of the Federal Reserve System when Janet Yellen's term expires at the end of January in 2018. Today's WSJ (p. 2)
L: Did you know there is a China Satellite Manufacturing Index (SMI) produced by a company named SpaceKnow that has been live on Bloomberg terminals since last year? We didn't! One of Jim's favorite economists, Carl Weinberg, mentioned it in his July 5 "Weekly Notes on China's Economy" so we looked it up. Carl is a purist and a bit skeptical of new indices, but as he says, "This metric is so different that we are going to cut it a little bit of slack, and at least agree to think about it as anecdotal evidence about what the [Chinese] economy is doing in real time." Whether it proves to be a reasonable index to use or not, it is certainly a fascinating attempt at trying to measure economic
J: The economic data flow for July started off with a bang—appropriate for today as we celebrate Brexit 1776—thanks to the good people at the Institute for Supply Management (ISM) in Tempe, AZ. They told us that the June 2017 PMI (Purchasing Managers Index) was 57.8 percent, the highest reading since 57.9 percent in August 2014. This index is a diffusion index, meaning that it measures the difference between positive (or no change) responses and negative ones from thousands of purchasing managers in 18 industry groups from all over the US. It is one of our oldest economic indicators, having been compiled and published since 1931 except for the four years of World War II. Among major indi
