Housing Starts Recross Million Mark


Housing starts moved back above the one million unit threshold again in September, after being revised up slightly for August. Multifamily starts accounted for nearly the entire comeback after starts cratered in August. Read More »

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Industrial Production Surges


Industrial production surged 1.0% in September, more than double market expectations, despite a small downward revision to August. Moreover, gains were fairly broad-based with the exception of the auto industry, which took a breather but is expected to pick up again later in the year. Electronics also took a hit, Read More »

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Retail Sales Disappoint


Total retail sales slipped 0.3% in September after surging in August. A drop in vehicle sales from a post-recession high was one reason for the weakness. Core retail sales, which exclude the volatile vehicle and gasoline components, also dipped slightly during the month. That was despite a sharp drop in prices at the pump and some freeing up of income for discretionary purchase Read More »

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2014 Nobel Prize for Economics: Jean Tirole


This is the time of year when economists become self-referential, turn inward and assess the state of the discipline by celebrating the recipient of the highest honor in the profession: the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel. (It is not one of the original prizes established by Alfred Nobel, but in all that matters, it is nonetheless a Nobel prize.)

This year the recognition went to Jean Tirole, a French economist (educated at the Massachusetts Institute of Technology) Read More »

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Job Openings at 13-Year High


Job openings hit a 13-year high in August, while hiring slowed and the number of people quitting a job stabilized. This suggests one of several scenarios: 1) the workers applying for jobs are woefully under qualified; 2) new applicants cannot pass their drug tests; 3) employers are deliberately not filling open positions to increase flexibility to hire up once economic conditions become more robust; Read More »

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Five Themes to Start the Week


Economic developments abroad were not in short supply during the past weekend, nor will they be in the week ahead.

1.    The first round of the Brazilian presidential election was, as expected, inconclusive, but somewhat surprisingly the center-right candidate Aécio Neves placed second behind incumbent President Dilma Rousseff. Now he will vie for the presidency in the runoff on October 26. According to the preliminary count of Sunday’s vote, Rousseff received 41% of the votes and Neves 34%. The socialist candidate, Marina Silva, who was rapidly rising according to the polls, finished a disappointing third with 21%. Because Neves is perceived as more pro-market and pro-growth than Rousseff or Silva, markets reacted with a rally. Nevertheless, our baseline expectation is that President Rousseff will succeed in securing the backing of Silva’s supporters and win a second mandate as Brazilian president. Since we deem president Rousseff a policy disappointment, (and we do not see signs of a change in course) our outlook for Brazil remains moderately pessimistic, Read More »

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Young Workers Looking for Work as Older Workers Are Hired


Payroll employment jumped 248,000 in September. The three-month moving average suggests payroll gains of 220,000 per month, which is in line with gains over the last year. Today’s data validate our view that the initial weak report for August was an anomaly. Read More »

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Construction Spending Disappoints


Construction spending dropped 0.8% in August after being revised down for the month of July. Losses were distributed between both the private and public sectors. Even private residential construction took a hit, with losses in remodeling offsetting gains in single and multifamily construction. Multifamily construction remains the primary driver in the housing market with increases of nearly 36% over one year ago, or four times the growth we are seeing in the single-family market. Read More »

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Payroll Forecast: Upside Risk to September Employment Numbers


We are looking for nonfarm payrolls to increase by 235,000 for September after adding only 142,000 in August. We estimate private sector employment will expand by 225,000. Risks to our forecast are largely to the upside, given that unemployment claims have been trending lower and employment indicators for the manufacturing and service sectors are on the rise, according to surveys by the Institute for Supply Managers (ISM). Revisions could raise the average monthly jobs totals for August and September to 200,000 Read More »

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Five Themes for the Week


I’ve written on five key themes or developments of the week just past in the international economy:

1. According to several press reports, Chinese leaders are considering the replacement of the central bank chief, Zhou Xiaochuan. Mr. Zhou is broadly seen as a reformer, who has been insisting on more liberalization in Chinese financial markets. His sacking would add uncertainty to the course of future policies Read More »

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