Showing posts with label US house prices. Show all posts
Showing posts with label US house prices. Show all posts
Monday, June 6, 2011
Top 5 Graphs: Aussie GDP, U.S. and China PMI, Monetary Policy
This week we start by checking out a dismal Q1 GDP result for Australia. Then we examine the slight fall in China's manufacturing PMI (purchasing manager index), as well as the U.S. manufacturing PMI shocker. Following that is a quick check in on US consumer confidence and housing market. Finally a review of some monetary policy decisions over the past week is checked out, before the flurry of policy activity due next week.
Tuesday, March 29, 2011
U.S. Housing and Confidence: Good, Bad or Ugly?
The U.S. just released two critical data points on the state of the consumer. The Consumer Confidence reading for March dropped 8.6 points to 63.4 from 72 in February (market consensus for 64). Meanwhile the S&P/Case-Shiller 20-city composite house price index dropped 3.0% year on year in January, or -0.2% month on month. So at first glance, both results were reasonably bad, but before we jump to conclusions, let's take a quick look at the details.
http://seekingalpha.com/article/260757-u-s-housing-and-confidence-good-bad-or-ugly
http://seekingalpha.com/article/260757-u-s-housing-and-confidence-good-bad-or-ugly
Saturday, February 26, 2011
Top 5 Economics Graphs of the Week - 26 Feb 2011
In this edition of the top 5 graphs of the week we review some of the GDP numbers coming out of the UK and Germany. Then we look at the consumer sentiment figures from the US, and take a look at the course of the US housing market. Finally we check out what's been going on in monetary policy; with a focus on the running theme of emerging market inflation.
1. UK GDP
The UK slipped into negative growth in Q4 2010, recording a q/q change in GDP of -0.6%, compared to 0.7% in the previous quarter. That put year on year growth at 1.5% from 2.5%, making the UK economic recovery seem somewhat short-lived. The results are not encouraging, especially in the backdrop of fiscal austerity measures and plans to fix the UK government financials. It brings to mind two ugly terms: stagflation and double-dip, stagflation is pretty much confirmed, but as for the double-dip, it remains to be seen. Speculation that a Bank of England rate hike may come has already been pushed out, so it remains a long hard road to economic recovery.
2. German GDP
Over in Germany, growth slowed down a little, but the EU economic powerhouse continued to surge along at about a 4% pace. Germany saw 0.4% growth q/q in Q4, compared to 0.7% in Q3, with the year on year growth rate at 4% in the past two quarters (3.9% in Q2). So it's clear where the strength is in the EU, which interestingly creates a bit of a tension; on the one hand you have the strong German economy, and on the other you have basket cases like the "PIGS". This remains a risk, but also a source of strength, for the course of the Euro and the EU over the coming year.
3. US Consumer Sentiment
In another positive sign for the US economy, the UoM Consumer Sentiment index continued to rise in February, at 77.5 vs 74.2 in Jan; with much of the rise coming from current conditions (86.9 vs 81.8 in Jan), but with expectations also rising (71.6 vs 69.3 in Jan). Also of interest though is the point that much of the jump in confidence was seen in the higher income households (driven by improving job prospects on the upper end of the socio-economic totem pole). As noted in the Reuters report: "Consumers are increasingly aware that the economy is improving and, more importantly, expect job prospects to become more favorable in 2011." However rising prices remains a thorn in the collective sides of consumers; but the key takeaway is that the result was good, and possibly signals further strength in the US economy.
4. US House Prices
The December results for the S&P/Case Shiller house price index showed further monthly declines with a -0.4% drop in December 2010, and an annual decline of -2.4%, extending a 6 month string of monthly drops in the 20-city index. The numbers just go to show that even though the rest of the US economy is starting to show more and more signs of life, the housing market still has a lot of ground to cover. The fact is that the fundamentals just aren't there to support rising house prices. But with the improving economy, rising consumer confidence, and slowly but surely improving job market, the higher probability outcome is stabilization or sideways movement in the price; rather than downward. But the housing market still remains a risk for the US economic recovery.
5. Monetary Policy Review
The monetary policy scene was dominated by emerging markets in the past week, with Russia, Colombia and Israel hiking rates 25bps and Vietnam going for another 100bps (on top of a 200bp increase the week before). The running theme in the statements from the central banks were basically about the aggregate demand drivers (econ growth) as well as the supply/price side drivers i.e. commodity prices. Indeed the variety of supply hits around the world in agriculture have seen a strong run up in agriculture commodity prices; energy has also popped up somewhat, but metals have also seen a rally (with copper still being a benefactor of emerging market growth). So the emerging markets inflation theme will likely continue for most of this year and of course creates a bit of policy risk - i.e. can the c.banks get inflation under control without stomping out econ growth?
Summary
So we saw what looked like the UK economy heading into a double dip, recording a negative quarter of GDP growth in December last year. Then we saw the opposite in Germany; continued strength and a source of stability (but possibly also instability) in the Euro Zone. In the US the consumer appeared to be getting more confident as conditions start to improve; adding signs of momentum in the US economic recovery. But the US housing market remained in the doldrums in December, as the fundamentals are yet to support more than stabilization in prices. Finally, in monetary policy we saw more tightening as the running theme of emerging market inflation played through, with policy risks proving that emerging market growth may not be such a sure thing over the medium term.
Sources
1. OECD Statistics stats.oecd.org/index.aspx
2. OECD Statistics stats.oecd.org/index.aspx
3. Thomson Reuters customers.reuters.com/community/university/default.aspx
4. Standard & Poor's www.standardandpoors.com
5. CentralBankNews.info www.centralbanknews.info
Article Source: http://www.econgrapher.com/top5graphs26feb11.html
1. UK GDP
The UK slipped into negative growth in Q4 2010, recording a q/q change in GDP of -0.6%, compared to 0.7% in the previous quarter. That put year on year growth at 1.5% from 2.5%, making the UK economic recovery seem somewhat short-lived. The results are not encouraging, especially in the backdrop of fiscal austerity measures and plans to fix the UK government financials. It brings to mind two ugly terms: stagflation and double-dip, stagflation is pretty much confirmed, but as for the double-dip, it remains to be seen. Speculation that a Bank of England rate hike may come has already been pushed out, so it remains a long hard road to economic recovery.
2. German GDP
Over in Germany, growth slowed down a little, but the EU economic powerhouse continued to surge along at about a 4% pace. Germany saw 0.4% growth q/q in Q4, compared to 0.7% in Q3, with the year on year growth rate at 4% in the past two quarters (3.9% in Q2). So it's clear where the strength is in the EU, which interestingly creates a bit of a tension; on the one hand you have the strong German economy, and on the other you have basket cases like the "PIGS". This remains a risk, but also a source of strength, for the course of the Euro and the EU over the coming year.
3. US Consumer Sentiment
In another positive sign for the US economy, the UoM Consumer Sentiment index continued to rise in February, at 77.5 vs 74.2 in Jan; with much of the rise coming from current conditions (86.9 vs 81.8 in Jan), but with expectations also rising (71.6 vs 69.3 in Jan). Also of interest though is the point that much of the jump in confidence was seen in the higher income households (driven by improving job prospects on the upper end of the socio-economic totem pole). As noted in the Reuters report: "Consumers are increasingly aware that the economy is improving and, more importantly, expect job prospects to become more favorable in 2011." However rising prices remains a thorn in the collective sides of consumers; but the key takeaway is that the result was good, and possibly signals further strength in the US economy.
4. US House Prices
The December results for the S&P/Case Shiller house price index showed further monthly declines with a -0.4% drop in December 2010, and an annual decline of -2.4%, extending a 6 month string of monthly drops in the 20-city index. The numbers just go to show that even though the rest of the US economy is starting to show more and more signs of life, the housing market still has a lot of ground to cover. The fact is that the fundamentals just aren't there to support rising house prices. But with the improving economy, rising consumer confidence, and slowly but surely improving job market, the higher probability outcome is stabilization or sideways movement in the price; rather than downward. But the housing market still remains a risk for the US economic recovery.
5. Monetary Policy Review
The monetary policy scene was dominated by emerging markets in the past week, with Russia, Colombia and Israel hiking rates 25bps and Vietnam going for another 100bps (on top of a 200bp increase the week before). The running theme in the statements from the central banks were basically about the aggregate demand drivers (econ growth) as well as the supply/price side drivers i.e. commodity prices. Indeed the variety of supply hits around the world in agriculture have seen a strong run up in agriculture commodity prices; energy has also popped up somewhat, but metals have also seen a rally (with copper still being a benefactor of emerging market growth). So the emerging markets inflation theme will likely continue for most of this year and of course creates a bit of policy risk - i.e. can the c.banks get inflation under control without stomping out econ growth?
Summary
So we saw what looked like the UK economy heading into a double dip, recording a negative quarter of GDP growth in December last year. Then we saw the opposite in Germany; continued strength and a source of stability (but possibly also instability) in the Euro Zone. In the US the consumer appeared to be getting more confident as conditions start to improve; adding signs of momentum in the US economic recovery. But the US housing market remained in the doldrums in December, as the fundamentals are yet to support more than stabilization in prices. Finally, in monetary policy we saw more tightening as the running theme of emerging market inflation played through, with policy risks proving that emerging market growth may not be such a sure thing over the medium term.
Sources
1. OECD Statistics stats.oecd.org/index.aspx
2. OECD Statistics stats.oecd.org/index.aspx
3. Thomson Reuters customers.reuters.com/community/university/default.aspx
4. Standard & Poor's www.standardandpoors.com
5. CentralBankNews.info www.centralbanknews.info
Article Source: http://www.econgrapher.com/top5graphs26feb11.html
Wednesday, February 23, 2011
US Housing and Consumer Confidence Update
While the US saw further improvement in the Consumer Confidence numbers, the same could not be said about the housing market data. The influential S&P/Case Shiller house price index registered a monthly decline of -0.4% in December 2010, and an annual decline of -2.4%, extending a 6 month string of monthly drops in the 20-city index. The numbers just go to show that even though the rest of the US economy is starting to show more and more signs of life, the housing market still has some ground to cover - indeed while the US consumer continues the deleveraging cycle, it's hard to see credible upside potential for house prices in the near term.
But its not all doom and gloom, as noted the US saw further improvement in the Consumer Confidence numbers (conference board). "The Index now stands at 70.4 (1985=100), up from 64.8 in January. The Present Situation Index improved to 33.4 from 31.1. The Expectations Index increased to 95.1 from 87.3 last month." So, much of the strength came from the jump in the expectations index - so people are starting to feel a little more optimistic which is always a good thing. However the employment situation is still weighing on people's minds - as is clearly seen in the chart below. With unemployment slightly improved, yet still at 9% (or higher depending how you count it!), people are still feeling wary about the present situation.
Looking forward there are a number of indicators that point to a strengthening US economy in the year ahead. Fiscal and monetary policy are way loose, and are likely to stay as such for the near term; the PMI indexes show momentum in the economy, especially the new orders index; a lot of businesses are still sitting on large piles of cash, and so-on. So on the outlook, property prices will likely continue to stagnate, unemployment will likely continue to fall (or at least there will be positive jobs growth), and consumer confidence is likely to gradually improve. But of course there are still plenty of downside risks - both internal and external to the US, so tread carefully...
Sources
Econ Grapher Analytics www.econgrapher.com
Conference Board www.conference-board.org
Standard & Poors www.standardandpoors.com
Bureau of Labour Statistics www.bls.gov
Article Source: http://www.econgrapher.com/23feb11-ushousecon.html
But its not all doom and gloom, as noted the US saw further improvement in the Consumer Confidence numbers (conference board). "The Index now stands at 70.4 (1985=100), up from 64.8 in January. The Present Situation Index improved to 33.4 from 31.1. The Expectations Index increased to 95.1 from 87.3 last month." So, much of the strength came from the jump in the expectations index - so people are starting to feel a little more optimistic which is always a good thing. However the employment situation is still weighing on people's minds - as is clearly seen in the chart below. With unemployment slightly improved, yet still at 9% (or higher depending how you count it!), people are still feeling wary about the present situation.
Looking forward there are a number of indicators that point to a strengthening US economy in the year ahead. Fiscal and monetary policy are way loose, and are likely to stay as such for the near term; the PMI indexes show momentum in the economy, especially the new orders index; a lot of businesses are still sitting on large piles of cash, and so-on. So on the outlook, property prices will likely continue to stagnate, unemployment will likely continue to fall (or at least there will be positive jobs growth), and consumer confidence is likely to gradually improve. But of course there are still plenty of downside risks - both internal and external to the US, so tread carefully...
Sources
Econ Grapher Analytics www.econgrapher.com
Conference Board www.conference-board.org
Standard & Poors www.standardandpoors.com
Bureau of Labour Statistics www.bls.gov
Article Source: http://www.econgrapher.com/23feb11-ushousecon.html
Saturday, January 1, 2011
Top 5 Economics Graphs of the Week - 1 Jan 2011
This week we look at China PMI, US house prices, US consumer confidence, French GDP results, and Japan's unemployment and inflation situation.
1. China PMI
China recorded slightly lower PMI figures for December with the HSBC index falling to 54.4 from 55.3 and the CFLP index falling to 53.9 from 55.2. Clearly there are a few issues bubbling away i.e. a spike in inflation... and more importantly - how the authorities deal with it. That alone will be one of the biggest wild-cards for 2011.
2. US Housing
The US housing market saw further weakness with the October reading of the Case-Shiller index down both on a monthly and annual basis. There's not much else to say on this one, house prices ran ahead of themselves and the market needs to correct - further government measures may put a temporary floor under the market, but the question is how long would that be necessary before the fundamentals finally came around? Another couple of years of flat house prices wouldn't be a surprise.
3. US Confidence
US Consumer Confidence dipped slightly in December, dropping to 52.5 from 54.1, with the weakness being expressed in both the current conditions and futures expectations indexes. Similar story to the housing market really - when will the key fundamentals turnaround? High unemployment and stagnant house prices will continue to weigh on this one in the medium term.
4. France GDP
France saw its economy expand 0.3% q/q vs 0.6% in Q2, with some minor downward revisions. Net exports made a negative contribution, household consumption and government consumption both made a positive contribution. Most are forecasting about 0.4% GDP growth in Q4. So it's chugging along OK for the French economy, not as fast as the Germans, but they're getting there.
5. Japan unemployment and inflation
Japan saw another month of positive inflation in November - barely, with the CPI increasing 0.1% y/y vs 0.2% in October. Meanwhile unemployment stuck around 5% with a 5.1% reading for November. Still many a challenge for Japan - but will the policy makers get it right? (for that matter what else is there left for them to do?)
Summary
So we saw China show a lower PMI figure on the back of uncertainty about the inflation battle. Over in the US there were no positive signs for the housing market in terms of prices in the near term, and consumer confidence is still low - also reflecting where fundamentals are currently at, but let's see what 2011 brings. Then we looked at France's GDP growth, and saw that they're chugging along alright out of the recession. Meanwhile in Japan there's just barely some positive inflation, and unemployment is little changed. So there you go, the first issue of 2011, may the year ahead bring you much happiness, health and success - it's sure to be an interesting year!
Sources
1. CFLP www.chinawuliu.com.cn & Markit/HSBC www.markiteconomics.com & Yahoo Finance finance.yahoo.com
2. Standard & Poor's www.standardandpoors.com
3. US Conference Board www.conference-board.org & US Bureau of Labor Statistics www.bls.gov
4. OECD Statistics Database stats.oecd.org/index.aspx
5. Trading Economics www.tradingeconomics.com
Article Source: http://www.econgrapher.com/top5graphs1jan11.html
1. China PMI
China recorded slightly lower PMI figures for December with the HSBC index falling to 54.4 from 55.3 and the CFLP index falling to 53.9 from 55.2. Clearly there are a few issues bubbling away i.e. a spike in inflation... and more importantly - how the authorities deal with it. That alone will be one of the biggest wild-cards for 2011.
2. US Housing
The US housing market saw further weakness with the October reading of the Case-Shiller index down both on a monthly and annual basis. There's not much else to say on this one, house prices ran ahead of themselves and the market needs to correct - further government measures may put a temporary floor under the market, but the question is how long would that be necessary before the fundamentals finally came around? Another couple of years of flat house prices wouldn't be a surprise.
3. US Confidence
US Consumer Confidence dipped slightly in December, dropping to 52.5 from 54.1, with the weakness being expressed in both the current conditions and futures expectations indexes. Similar story to the housing market really - when will the key fundamentals turnaround? High unemployment and stagnant house prices will continue to weigh on this one in the medium term.
4. France GDP
France saw its economy expand 0.3% q/q vs 0.6% in Q2, with some minor downward revisions. Net exports made a negative contribution, household consumption and government consumption both made a positive contribution. Most are forecasting about 0.4% GDP growth in Q4. So it's chugging along OK for the French economy, not as fast as the Germans, but they're getting there.
5. Japan unemployment and inflation
Japan saw another month of positive inflation in November - barely, with the CPI increasing 0.1% y/y vs 0.2% in October. Meanwhile unemployment stuck around 5% with a 5.1% reading for November. Still many a challenge for Japan - but will the policy makers get it right? (for that matter what else is there left for them to do?)
Summary
So we saw China show a lower PMI figure on the back of uncertainty about the inflation battle. Over in the US there were no positive signs for the housing market in terms of prices in the near term, and consumer confidence is still low - also reflecting where fundamentals are currently at, but let's see what 2011 brings. Then we looked at France's GDP growth, and saw that they're chugging along alright out of the recession. Meanwhile in Japan there's just barely some positive inflation, and unemployment is little changed. So there you go, the first issue of 2011, may the year ahead bring you much happiness, health and success - it's sure to be an interesting year!
Sources
1. CFLP www.chinawuliu.com.cn & Markit/HSBC www.markiteconomics.com & Yahoo Finance finance.yahoo.com
2. Standard & Poor's www.standardandpoors.com
3. US Conference Board www.conference-board.org & US Bureau of Labor Statistics www.bls.gov
4. OECD Statistics Database stats.oecd.org/index.aspx
5. Trading Economics www.tradingeconomics.com
Article Source: http://www.econgrapher.com/top5graphs1jan11.html
Friday, December 3, 2010
Top 5 Economics Graphs of the Week - 4 December 2010
This week we look at the US PMI results; while also reviewing the China PMI data for November. Then we check out the 3rd quarter GDP results for Australia, before wrapping up with a closer look at some US data on the housing market, consumer confidence, and the nonfarm payrolls report.
1. US PMI
The US manufacturing PMI came in at 56.6, a little below consensus 57 and previous 56.9, the non-manufacturing PMI matched consensus at 55.0, and increased vs October's 54.3 reading. So between manufacturing and services there was a bit of variation, also within the results the manufacturing sub-components were not great e.g. falls in new orders, production, employment, exports. But within the services sub-indices there was a bit more positives e.g. rises in new orders, new export orders, employment, etc. So overall the results are generally positive, and not really surprising given where the US economy is at.
2. China PMI
Over to China, the official PMI rose to 55.2 from 54.7 in October; beyond expectations for 54.8. The HSBC Markit index rose to an 8 month high of 55.3 from 54.8 in October. The standouts in the sub-indices were Production (58.5 vs 57.1), Supplier Delivery (48.9 vs 49.3), New Orders was basically flat, but still strong (58.3 vs 58.2), similarly Employees was little changed (52.0 vs 52.1). In general its good to see the index rising, its also positive to see it still in the expansionary zone, and it will give comfort to those watching China's attempt at a managed slowdown as inflation pressures rise.
3. Australia GDP
The Australian economy grew 0.20% q/q in the September quarter, placing Australian GDP up 2.7% year on year. The pace of growth was slower than the expected 0.40% q/q growth, as global volatility, exchange rate pressures on exports, and withdrawal of fiscal stimulus measures took their toll on the Australian economy. Looking forward though the pace of growth is likely to rebound in 2011 as the resources sector surges ahead with a number of large scale mining projects in the pipeline, and farming continues to contribute; and of course the flow on effects to the rest of the economy.
4. US House Prices and Confidence
Two key pieces of data release last week were the Case-Shiller house price index, which showed house prices falling further (no surprise). The other key data point was the Conference Board Consumer Confidence index, which showed a jump to 54.1 (vs consensus 52, previous 50.2). Within the confidence numbers, the present situation index rose to 24 from 23.5 and the expectations index jumped to 74.2 from 67.5 previously. So people are feeling a little better about the future, but just not so much about the here and now. And looking to the housing market, the future may be better, but the short-medium term probably has further downside risk unless the fundamentals sharply turnaround.
5. US Nonfarm Payrolls
The US added 39k nonfarm payrolls in November, vs 151k in October, and well below consensus 168k. Private payrolls were up 50k vs 159k in October. Average hourly earnings were flat, as was the average work week. So overall not a great result, good that it was positive, but basically it lines up with the idea that the US recovery is not going to be linear, and basically that there is going to be choppiness as the US economy muddles through the next year or two.
Summary
So we saw the manufacturing PMI in the US still strong, but with some negatives in the sub-components, the services PMI however was a bit stronger and relatively more promising. Meanwhile in China the manufacturing PMI improved, showing that the concern is rightfully more about the risks of overheating rather than not growing. In Australia, the economy continued to grow, but a little less so as stimulus wore off, but expect the slowdown to be temporary. Back to the US, the housing market is still under the gun, but the consumer is slowly feeling a bit better about the future, in spite of the job market also remaining relatively subdued.
Sources
1. Institute for Supply Management www.ism.ws & Yahoo Finance finance.yahoo.com
2. CFLP www.chinawuliu.com.cn & Markit/HSBC www.markiteconomics.com & National Bureau of Statistics www.stats.gov.cn
3. Australian Bureau of Statistics www.abs.gov.au
4. Conference Board www.conference-board.org & Standard & Poors www.standardandpoors.com
5. Bureau of Labour Statistics www.bls.gov
Article Source: http://www.econgrapher.com/top5graphs-4dec.html
1. US PMI
The US manufacturing PMI came in at 56.6, a little below consensus 57 and previous 56.9, the non-manufacturing PMI matched consensus at 55.0, and increased vs October's 54.3 reading. So between manufacturing and services there was a bit of variation, also within the results the manufacturing sub-components were not great e.g. falls in new orders, production, employment, exports. But within the services sub-indices there was a bit more positives e.g. rises in new orders, new export orders, employment, etc. So overall the results are generally positive, and not really surprising given where the US economy is at.
2. China PMI
Over to China, the official PMI rose to 55.2 from 54.7 in October; beyond expectations for 54.8. The HSBC Markit index rose to an 8 month high of 55.3 from 54.8 in October. The standouts in the sub-indices were Production (58.5 vs 57.1), Supplier Delivery (48.9 vs 49.3), New Orders was basically flat, but still strong (58.3 vs 58.2), similarly Employees was little changed (52.0 vs 52.1). In general its good to see the index rising, its also positive to see it still in the expansionary zone, and it will give comfort to those watching China's attempt at a managed slowdown as inflation pressures rise.
3. Australia GDP
The Australian economy grew 0.20% q/q in the September quarter, placing Australian GDP up 2.7% year on year. The pace of growth was slower than the expected 0.40% q/q growth, as global volatility, exchange rate pressures on exports, and withdrawal of fiscal stimulus measures took their toll on the Australian economy. Looking forward though the pace of growth is likely to rebound in 2011 as the resources sector surges ahead with a number of large scale mining projects in the pipeline, and farming continues to contribute; and of course the flow on effects to the rest of the economy.
4. US House Prices and Confidence
Two key pieces of data release last week were the Case-Shiller house price index, which showed house prices falling further (no surprise). The other key data point was the Conference Board Consumer Confidence index, which showed a jump to 54.1 (vs consensus 52, previous 50.2). Within the confidence numbers, the present situation index rose to 24 from 23.5 and the expectations index jumped to 74.2 from 67.5 previously. So people are feeling a little better about the future, but just not so much about the here and now. And looking to the housing market, the future may be better, but the short-medium term probably has further downside risk unless the fundamentals sharply turnaround.
5. US Nonfarm Payrolls
The US added 39k nonfarm payrolls in November, vs 151k in October, and well below consensus 168k. Private payrolls were up 50k vs 159k in October. Average hourly earnings were flat, as was the average work week. So overall not a great result, good that it was positive, but basically it lines up with the idea that the US recovery is not going to be linear, and basically that there is going to be choppiness as the US economy muddles through the next year or two.
Summary
So we saw the manufacturing PMI in the US still strong, but with some negatives in the sub-components, the services PMI however was a bit stronger and relatively more promising. Meanwhile in China the manufacturing PMI improved, showing that the concern is rightfully more about the risks of overheating rather than not growing. In Australia, the economy continued to grow, but a little less so as stimulus wore off, but expect the slowdown to be temporary. Back to the US, the housing market is still under the gun, but the consumer is slowly feeling a bit better about the future, in spite of the job market also remaining relatively subdued.
Sources
1. Institute for Supply Management www.ism.ws & Yahoo Finance finance.yahoo.com
2. CFLP www.chinawuliu.com.cn & Markit/HSBC www.markiteconomics.com & National Bureau of Statistics www.stats.gov.cn
3. Australian Bureau of Statistics www.abs.gov.au
4. Conference Board www.conference-board.org & Standard & Poors www.standardandpoors.com
5. Bureau of Labour Statistics www.bls.gov
Article Source: http://www.econgrapher.com/top5graphs-4dec.html
Friday, October 1, 2010
Top 5 Economics Graphs of the Week - 2 October 2010
This week we review the apparent rebound in the Chinese manufacturing sector, followed by a look at the quarterly Tankan survey results from Japan. Then we look at the US PMI results which show grim signs; as do the housing and confidence figures. Finally we wrap up with a look at some other statistics from Japan in this top 3 economies of the world version of the top 5 graphs of the week.
1. China PMI: Continued Rebound
China saw a continued rebound in its manufacturing sector, as indicated by the PMI results which had the official index rising to 53.8 from 51.7 in August, and the HSBC index also rising from 51.9 to 52.9. The rebound in the main index is a promising sign, indeed the new orders index rose to 56.3 from 53.1 while the export-order index rose only to 52.8 from 52.2. Also of note in the data was the rise in the input price index component, which rose to 65.3 from 60.5. Seasonal factors aside (it is supposed to be seasonally adjusted), i.e. filling orders for Christmas, the results show an end to the drop in the index, and possibly a new revival as the Chinese economy continues to expand and personal incomes rise.
2. Japan Tankan: Gradual Recovery
Another positive, but somewhat less so, was the Tankan September quarter survey results from Japan. The overall index improved to -10 from -15 in the 2nd quarter this year. Into the detail, the standout was medium-sized manufacturers, who saw a 10 point rise from -6 to positive 4, similarly, large manufacturers solidified their recovery, adding 7 points to positive 8. So in that negatives were getting less negative, and prospects were improving for the 3rd quarter, it was a good result. However the December 2010 forecast figures were much less optimistic, with most firms expecting a reasonably deterioration in conditions. So the story is basically, small improvement, outlook not great.
3. US PMI: Grim Signs
The US also released its PMI results this week, showing what appears to be a continued turn in prospects. If you recall, there was a time when people were asking "what will happen when the inventory cycle and stimulus runs out?" and here's your answer, not a whole lot really for the US. The PMI index fell from 56.3 to 54.4 with the only real strength coming from an increase in the prices sub-index from 61.5 to 70.5, a significant increase - stagflation anyone? All the other indexes that you usually want to see rise didn't, so not a great result from the US.
4. US Housing and Confidence
Staying with the US, and thinking about gloomy economic prospects, there's the US housing market and consumer confidence data details that came out this week. The US housing market continued to flat-line (no surprises there), and will likely do so for an extended period. Meanwhile the US consumer also basically flat-lined, if not deteriorated a little. The Conference Board Consumer Confidence index came out much worse than expected at 48.5 vs 53.5 in August, the present situation index decreased to 23.1 from 24.9 and the expectations index fell to 65.4 from 72 in August. So overall, while it's still not panic time, things are just not good, and they will continue to muddle along because of the damage caused by the excesses everyone got into that caused the financial crisis.
5. Japan Inflation and Unemployment
Back to Japan, there was some slight improvements in the inflation and employment situation with the unemployment rate dipping to 5.1% from 5.2%, and the deflation rate improving slightly to -1.0% from -1.1% in July. So onward with the gradual export driven recovery in Japan - "Yentervention" or not. So it seems that some progress might be getting through from the Bank of Japan in its desperate struggle to stem deflation and stimulate the economy, but there are still serious challenges for the Japanese economy, at least it has China as its neighbor and trade partner, otherwise, muddle along too.
Summary
This week we looked at the 3 largest economies as they release indicators on the prospects of their manufacturing and business sectors. China showed pretty good results all round, Japan showed slight improvement, and the US did not impress with its PMI results. The story of continued economic growth (catch up) and expansion in China remains intact, and the story of a long hard slog in the US and Japan also remains intact.
Japan and the US are the real spots to watch as the global recovery unfolds, though emerging markets are coming up fast and strong, it is these two pillars of stability that will drive or fail to drive much of the growth in the near term. Unfortunately things are still subdued in the US as it goes through the muddle ages of the recovery, and even Japan is showing potential warning signs of a double-dip.
Go emerging markets, hang in there developed markets...
Sources
1. CFLP www.chinawuliu.com.cn & Markit/HSBC www.markiteconomics.com & Yahoo Finance finance.yahoo.com
2. Bank of Japan www.boj.or.jp
3. Institute for Supply Management www.ism.ws
4. Standard & Poors www.standardandpoors.com & Conference Board www.conference-board.org
5. Trading Economics www.tradingeconomics.com
Article Source: http://www.econgrapher.com/top5graphs2oct.html
1. China PMI: Continued Rebound
China saw a continued rebound in its manufacturing sector, as indicated by the PMI results which had the official index rising to 53.8 from 51.7 in August, and the HSBC index also rising from 51.9 to 52.9. The rebound in the main index is a promising sign, indeed the new orders index rose to 56.3 from 53.1 while the export-order index rose only to 52.8 from 52.2. Also of note in the data was the rise in the input price index component, which rose to 65.3 from 60.5. Seasonal factors aside (it is supposed to be seasonally adjusted), i.e. filling orders for Christmas, the results show an end to the drop in the index, and possibly a new revival as the Chinese economy continues to expand and personal incomes rise.
2. Japan Tankan: Gradual Recovery
Another positive, but somewhat less so, was the Tankan September quarter survey results from Japan. The overall index improved to -10 from -15 in the 2nd quarter this year. Into the detail, the standout was medium-sized manufacturers, who saw a 10 point rise from -6 to positive 4, similarly, large manufacturers solidified their recovery, adding 7 points to positive 8. So in that negatives were getting less negative, and prospects were improving for the 3rd quarter, it was a good result. However the December 2010 forecast figures were much less optimistic, with most firms expecting a reasonably deterioration in conditions. So the story is basically, small improvement, outlook not great.
3. US PMI: Grim Signs
The US also released its PMI results this week, showing what appears to be a continued turn in prospects. If you recall, there was a time when people were asking "what will happen when the inventory cycle and stimulus runs out?" and here's your answer, not a whole lot really for the US. The PMI index fell from 56.3 to 54.4 with the only real strength coming from an increase in the prices sub-index from 61.5 to 70.5, a significant increase - stagflation anyone? All the other indexes that you usually want to see rise didn't, so not a great result from the US.
4. US Housing and Confidence
Staying with the US, and thinking about gloomy economic prospects, there's the US housing market and consumer confidence data details that came out this week. The US housing market continued to flat-line (no surprises there), and will likely do so for an extended period. Meanwhile the US consumer also basically flat-lined, if not deteriorated a little. The Conference Board Consumer Confidence index came out much worse than expected at 48.5 vs 53.5 in August, the present situation index decreased to 23.1 from 24.9 and the expectations index fell to 65.4 from 72 in August. So overall, while it's still not panic time, things are just not good, and they will continue to muddle along because of the damage caused by the excesses everyone got into that caused the financial crisis.
5. Japan Inflation and Unemployment
Back to Japan, there was some slight improvements in the inflation and employment situation with the unemployment rate dipping to 5.1% from 5.2%, and the deflation rate improving slightly to -1.0% from -1.1% in July. So onward with the gradual export driven recovery in Japan - "Yentervention" or not. So it seems that some progress might be getting through from the Bank of Japan in its desperate struggle to stem deflation and stimulate the economy, but there are still serious challenges for the Japanese economy, at least it has China as its neighbor and trade partner, otherwise, muddle along too.
Summary
This week we looked at the 3 largest economies as they release indicators on the prospects of their manufacturing and business sectors. China showed pretty good results all round, Japan showed slight improvement, and the US did not impress with its PMI results. The story of continued economic growth (catch up) and expansion in China remains intact, and the story of a long hard slog in the US and Japan also remains intact.
Japan and the US are the real spots to watch as the global recovery unfolds, though emerging markets are coming up fast and strong, it is these two pillars of stability that will drive or fail to drive much of the growth in the near term. Unfortunately things are still subdued in the US as it goes through the muddle ages of the recovery, and even Japan is showing potential warning signs of a double-dip.
Go emerging markets, hang in there developed markets...
Sources
1. CFLP www.chinawuliu.com.cn & Markit/HSBC www.markiteconomics.com & Yahoo Finance finance.yahoo.com
2. Bank of Japan www.boj.or.jp
3. Institute for Supply Management www.ism.ws
4. Standard & Poors www.standardandpoors.com & Conference Board www.conference-board.org
5. Trading Economics www.tradingeconomics.com
Article Source: http://www.econgrapher.com/top5graphs2oct.html
Wednesday, July 28, 2010
US Housing and Confidence Review
Similar story to last time, US consumer confidence in July fell worse than expected. The conference board index, designed to measure consumer attitudes on present economic conditions and expectations of future conditions, came in at 50.4 vs consensus for 51.0 and previous of 52.9. The drop was led by a fall in the expectations component with that sub-index falling to 66.6 from 72.7 in June, meanwhile the present situation sub-index fell to 26.1 from 26.8. Overall the index is being held down by a poor labor market, and still tough economic conditions.
Over to the housing front, the May S&P Case-Shiller home price index on the 20-city side showed a 3.9% rise year on year (vs 4.1% in April), and chalked up a 0.5% monthly gain (vs 0.6% in April). The 10-city index showed a 1.2% gain month on month (previous 0.7%), and 5.4% year on year (previous 4.6%). Much of the year on year gains are simply driven by the low base comparator, but there is also the fact that the 3-month moving average aspect captures some of the tax credit effect. As you can see in the chart below, the nascent rebound will surely descend into a double dip of sorts - of course it will not be as severe, but there will not be sustained house price increases until the fundamentals are there to sustain and support it.
So what do these data points collectively point to? The obvious first; things are still not good, the house price slump is miles from being recouped - indeed, the recent rebound we're seeing could well give way to a housing double dip, given there are no real fundamentals to support a sustained price increase. On consumer front, obviously people are affected by the housing market (and of course vice versa!), consumer confidence is being held down by the stagnant housing market, the feeble labor market (with persistently high unemployment), and of course austerity imperative - not only on the government front, but on the personal front. Austerity is the name of the game, because who know what will come next!
Sources
Econ Grapher Analytics www.econgrapher.com
Conference Board www.conference-board.org
Standard & Poors www.standardandpoors.com
Article Source: http://www.econgrapher.com/28july-ushousecon.html
Over to the housing front, the May S&P Case-Shiller home price index on the 20-city side showed a 3.9% rise year on year (vs 4.1% in April), and chalked up a 0.5% monthly gain (vs 0.6% in April). The 10-city index showed a 1.2% gain month on month (previous 0.7%), and 5.4% year on year (previous 4.6%). Much of the year on year gains are simply driven by the low base comparator, but there is also the fact that the 3-month moving average aspect captures some of the tax credit effect. As you can see in the chart below, the nascent rebound will surely descend into a double dip of sorts - of course it will not be as severe, but there will not be sustained house price increases until the fundamentals are there to sustain and support it.
So what do these data points collectively point to? The obvious first; things are still not good, the house price slump is miles from being recouped - indeed, the recent rebound we're seeing could well give way to a housing double dip, given there are no real fundamentals to support a sustained price increase. On consumer front, obviously people are affected by the housing market (and of course vice versa!), consumer confidence is being held down by the stagnant housing market, the feeble labor market (with persistently high unemployment), and of course austerity imperative - not only on the government front, but on the personal front. Austerity is the name of the game, because who know what will come next!
Sources
Econ Grapher Analytics www.econgrapher.com
Conference Board www.conference-board.org
Standard & Poors www.standardandpoors.com
Article Source: http://www.econgrapher.com/28july-ushousecon.html
Wednesday, June 30, 2010
US Housing and Confidence Review
Markets took a dive today as the US consumer confidence numbers disappointed; showing a reading of 52.9 vs consensus 63.3, and down sharply on the May reading of a downward revised 62.7, as consumers adjusted their views slightly on the back of a still tepid jobs market.
But it's not really time to hit the panic button yet, a lot of commentators are running around saying we are on the cusp of the next great depression, but at least in terms of the consumer confidence numbers there's not really anything to worry about. It just reflects the reality that things are hard, jobs are still growing relatively slowly, the housing market is going sideways (if not down), and the priority is squarely on recovering and de-leveraging; though things may be bad they are not dire, yet.
There is a tail risk that things could get a lot worse, there is a reasonable probability that things will slow further, and then there's a pretty good chance that things will carry on just fine and that the gradual economic recovery will continue even as stimulus measures run their course (though note, a lot of the stimulus plan is still unspent). Indeed on the stimulus front, the rhetoric from Washington seems to be more for additional stimulus than fiscal austerity/responsibility.
Speaking of tail risks, the US economic Achilles heel; the housing market, showed further signs of not really doing much at all in April. The 20-city composite index was up 0.4% month on month, and 4% year on year. This is still an area of vulnerability as the potential for further defaults rise given the tough conditions (as confirmed by the confidence numbers), and slow or no income growth puts a cap on demand.
There is a non-zero probability that the US government will provide additional stimulus targeted at the housing market to put a floor under prices; especially with congressional elections in November. If not the path of the housing market will likely be dependent on lending rates staying low, and jobs growth picking up appreciably - neither of which are exceedingly likely outcomes.
So what are the key points? I have presented both a positive and a negative spin on the data; there is the reassurance - or seeing the numbers as what they really mean. But there is also the recognition that things could get worse; but that they will likely carry on business as usual; and that the gradual - yet fragile economic recovery will continue. In other words, don't panic yet, this is what a recovery from such a deep and structurally meaningful recession should look like. At least save your panic for when or if the tail risks materialize!
Sources
Econ Grapher Analytics www.econgrapher.com
Conference Board www.conference-board.org
Standard & Poors www.standardandpoors.com
Article Source: http://www.econgrapher.com/30june-ushousecon.html
But it's not really time to hit the panic button yet, a lot of commentators are running around saying we are on the cusp of the next great depression, but at least in terms of the consumer confidence numbers there's not really anything to worry about. It just reflects the reality that things are hard, jobs are still growing relatively slowly, the housing market is going sideways (if not down), and the priority is squarely on recovering and de-leveraging; though things may be bad they are not dire, yet.
There is a tail risk that things could get a lot worse, there is a reasonable probability that things will slow further, and then there's a pretty good chance that things will carry on just fine and that the gradual economic recovery will continue even as stimulus measures run their course (though note, a lot of the stimulus plan is still unspent). Indeed on the stimulus front, the rhetoric from Washington seems to be more for additional stimulus than fiscal austerity/responsibility.
Speaking of tail risks, the US economic Achilles heel; the housing market, showed further signs of not really doing much at all in April. The 20-city composite index was up 0.4% month on month, and 4% year on year. This is still an area of vulnerability as the potential for further defaults rise given the tough conditions (as confirmed by the confidence numbers), and slow or no income growth puts a cap on demand.
There is a non-zero probability that the US government will provide additional stimulus targeted at the housing market to put a floor under prices; especially with congressional elections in November. If not the path of the housing market will likely be dependent on lending rates staying low, and jobs growth picking up appreciably - neither of which are exceedingly likely outcomes.
So what are the key points? I have presented both a positive and a negative spin on the data; there is the reassurance - or seeing the numbers as what they really mean. But there is also the recognition that things could get worse; but that they will likely carry on business as usual; and that the gradual - yet fragile economic recovery will continue. In other words, don't panic yet, this is what a recovery from such a deep and structurally meaningful recession should look like. At least save your panic for when or if the tail risks materialize!
Sources
Econ Grapher Analytics www.econgrapher.com
Conference Board www.conference-board.org
Standard & Poors www.standardandpoors.com
Article Source: http://www.econgrapher.com/30june-ushousecon.html
Friday, May 28, 2010
Top 5 Graphs of the Week - 29 May 2010
This week we look at the 2nd estimate of US GDP, US house prices and consumer confidence, the Japanese unemployment and deflation picture, Japan's international trade, and New Zealand's international trade. In the analysis we arrive at a one line summary that says things are still chugging along in this post-great-recession environment, but risks are rising.
1. US GDP
The 2nd estimate of US GDP came in slightly lower than the first estimate. The figure (SAAR) was 3.0% (or 0.8% q/q) against initial 3.2%, and consensus 3.5%. The year on year figure now sits at 2.5%, which considering the depth of the recession is not really all that impressive. The overall result is symptomatic of a gradual and fragile recovery, and though the risks have been repeatedly highlighted, they've only really taken on a real consideration as things like the Euro crisis, housing market weakness, and geopolitical situations (e.g. Korea), have surfaced. On that note, time to review the consumer confidence and housing market situation (below).
2. US House Prices and Confidence
US Consumer Confidence picked up strongly in May to 63.3 from 57.9 in April (beating consensus 59.0). On the components, present conditions picked up from 28.2 to 30.2, while future expectations jumped to 85.3 from 77.4 which is positive from an outlook perspective. On the housing market, the S&P Case Shiller index (20-City Composite) was basically flat in March. Consumer Confidence has increasingly become a proxy for unemployment and house prices. Particularly on the jobs side, Consumer confidence is now basically a second order metric of the unemployment rate, and it will probably only meaningfully recover once the jobs (and housing) market picks up.
3. Japan Inflation and Unemployment
Japan saw worse figures on both fronts in April, with the jobless rate ticking up slightly to 5.1% from 5.0% in March (having gone as low as 4.9% after peaking initially at 5.6%). On the inflation (deflation) side Japan's consumer price index fell by -1.5% year on year; accelerating declines since the -1.2% decline in March (driven in part by high school fees), and showing no sign of respite in the deflation trap. Japan's economy has been recovering pretty sharply on a GDP basis since the height of the crisis, but it still faces significant problems, such as those highlighted in the chart below (as well as fiscal issues). Indeed the main strength in the Japanese economy is the export sector (see below).
4. Japan International Trade
Japan recorded stronger trade numbers in April, with exports growing 40.4% year on year to 5.89 trillion yen (beating consensus 38.9%). Imports also grew, rising 24.2% year on year to 5.15 trillion yen. This left the trade surplus at 742 billion yen (consensus 709), down from 949 billion in March. As noted above (and last week), this is the bright spot in the Japanese economy. Boosted by a strong economy (in part helped by strong stimulus spending) in China, and the global pick up in trade, boosted in part by the inventory cycle (of which Japan benefits from due to its large manufacturing base, particularly in electronics goods). So basically this is a bright spot, but also a vulnerability for Japan - any global double dip in international trade will stymie the Japanese economy.
5. New Zealand International Trade
New Zealand recorded a higher surplus in April (NZ$656m vs NZ$590m in March, and consensus NZ$445m), due to decline in imports (e.g. crude oil and machinery), while commodity prices and seasonal factors boosted soft commodity exports (dairy, agriculture, logs). Exports fell 2.2% from March to NZ$3.97 billion, lead by the dairy sector. Exports to China increased 44% to NZ$460 million, with China now New Zealand's second biggest customer (after Australia), as the free trade agreement signed in 2008 boosted trade ties between the two countries. The improvement is likely to be temporary however, because as the New Zealand economy recovers, demand for imports will grow, and interest rates will go up which will strengthen the NZD (making exports less competitive).
Summary
So this week we saw the US economy slowly climbing out of recession, and US house prices stagnating; while consumer confidence saw some respite. In Japan, the deflation situation worsened slightly, as did unemployment, but international trade (the main stay of Japan's economy) is still going strong. The global trade recovery picture was also somewhat echoed in New Zealand's trade results, with China also playing a key part, but owing much of the improvement to cyclical factors.
Together the data supports a view of a fragile recovery from a deep recession. It also affirms the view of recovering global trade, driven primarily by cyclical factors such as inventory cycles, commodity cycles, and some residual impact from stimulus spending. International trade still remains a vulnerable point in the global recovery, as a worsening of the Euro crisis or geopolitical events have the potential to scuttle the recovery in trade - which in turn would scuttle the still relatively nascent and fragile economic recovery. So in one line, things are still chugging along in this post-great-recession environment, but risks are rising.
Sources
1. US Bureau of Economic Analysis www.bea.gov
2. Conference Board www.conference-board.org Standard & Poors www.standardandpoors.com
3. Japan External Trade Organization www.jetro.go.jp
4. Trading Economics www.tradingeconomics.com
5. Statistics New Zealand www.stats.govt.nz
Article Source: http://www.econgrapher.com/top5graphs29may.html
1. US GDP
The 2nd estimate of US GDP came in slightly lower than the first estimate. The figure (SAAR) was 3.0% (or 0.8% q/q) against initial 3.2%, and consensus 3.5%. The year on year figure now sits at 2.5%, which considering the depth of the recession is not really all that impressive. The overall result is symptomatic of a gradual and fragile recovery, and though the risks have been repeatedly highlighted, they've only really taken on a real consideration as things like the Euro crisis, housing market weakness, and geopolitical situations (e.g. Korea), have surfaced. On that note, time to review the consumer confidence and housing market situation (below).
2. US House Prices and Confidence
US Consumer Confidence picked up strongly in May to 63.3 from 57.9 in April (beating consensus 59.0). On the components, present conditions picked up from 28.2 to 30.2, while future expectations jumped to 85.3 from 77.4 which is positive from an outlook perspective. On the housing market, the S&P Case Shiller index (20-City Composite) was basically flat in March. Consumer Confidence has increasingly become a proxy for unemployment and house prices. Particularly on the jobs side, Consumer confidence is now basically a second order metric of the unemployment rate, and it will probably only meaningfully recover once the jobs (and housing) market picks up.
3. Japan Inflation and Unemployment
Japan saw worse figures on both fronts in April, with the jobless rate ticking up slightly to 5.1% from 5.0% in March (having gone as low as 4.9% after peaking initially at 5.6%). On the inflation (deflation) side Japan's consumer price index fell by -1.5% year on year; accelerating declines since the -1.2% decline in March (driven in part by high school fees), and showing no sign of respite in the deflation trap. Japan's economy has been recovering pretty sharply on a GDP basis since the height of the crisis, but it still faces significant problems, such as those highlighted in the chart below (as well as fiscal issues). Indeed the main strength in the Japanese economy is the export sector (see below).
4. Japan International Trade
Japan recorded stronger trade numbers in April, with exports growing 40.4% year on year to 5.89 trillion yen (beating consensus 38.9%). Imports also grew, rising 24.2% year on year to 5.15 trillion yen. This left the trade surplus at 742 billion yen (consensus 709), down from 949 billion in March. As noted above (and last week), this is the bright spot in the Japanese economy. Boosted by a strong economy (in part helped by strong stimulus spending) in China, and the global pick up in trade, boosted in part by the inventory cycle (of which Japan benefits from due to its large manufacturing base, particularly in electronics goods). So basically this is a bright spot, but also a vulnerability for Japan - any global double dip in international trade will stymie the Japanese economy.
5. New Zealand International Trade
New Zealand recorded a higher surplus in April (NZ$656m vs NZ$590m in March, and consensus NZ$445m), due to decline in imports (e.g. crude oil and machinery), while commodity prices and seasonal factors boosted soft commodity exports (dairy, agriculture, logs). Exports fell 2.2% from March to NZ$3.97 billion, lead by the dairy sector. Exports to China increased 44% to NZ$460 million, with China now New Zealand's second biggest customer (after Australia), as the free trade agreement signed in 2008 boosted trade ties between the two countries. The improvement is likely to be temporary however, because as the New Zealand economy recovers, demand for imports will grow, and interest rates will go up which will strengthen the NZD (making exports less competitive).
Summary
So this week we saw the US economy slowly climbing out of recession, and US house prices stagnating; while consumer confidence saw some respite. In Japan, the deflation situation worsened slightly, as did unemployment, but international trade (the main stay of Japan's economy) is still going strong. The global trade recovery picture was also somewhat echoed in New Zealand's trade results, with China also playing a key part, but owing much of the improvement to cyclical factors.
Together the data supports a view of a fragile recovery from a deep recession. It also affirms the view of recovering global trade, driven primarily by cyclical factors such as inventory cycles, commodity cycles, and some residual impact from stimulus spending. International trade still remains a vulnerable point in the global recovery, as a worsening of the Euro crisis or geopolitical events have the potential to scuttle the recovery in trade - which in turn would scuttle the still relatively nascent and fragile economic recovery. So in one line, things are still chugging along in this post-great-recession environment, but risks are rising.
Sources
1. US Bureau of Economic Analysis www.bea.gov
2. Conference Board www.conference-board.org Standard & Poors www.standardandpoors.com
3. Japan External Trade Organization www.jetro.go.jp
4. Trading Economics www.tradingeconomics.com
5. Statistics New Zealand www.stats.govt.nz
Article Source: http://www.econgrapher.com/top5graphs29may.html
Friday, April 30, 2010
Top 5 Graphs of the Week - 1 May 2010
This week we look at Q1 GDP results from the US and Republic of Korea, then we look at an interesting chart on US housing and confidence, then a brief snapshot of Japan with unemployment and deflation numbers, and finally a monetary policy review with emerging markets taking the spotlight.
1. US GDP
The US unsurprisingly pulled through some growth again in the first quarter of 2010 with an annualised 3.2% (i.e. actually 0.8% q/q) against consensus for 3.4%, and previous of 5.6%. Year on year growth moved up to 2.5% vs 0.1% in Q4 09. There are some interesting signs in this result compared to the previous one; December was all about the inventory cycle, but this quarter we're seeing strength in consumption (3.6% vs 1.6%), and continued strength in real business investment i.e. equipment and software as opposed to buildings (13.4% vs 19%). But net exports were down with imports growing faster than exports, also government consumption expenditure dropped off again. So while the figure came in slightly under there are some vaguely positive signs in there for now...
2. South Korean GDP
As mentioned the other day South Korea announced its GDP results with a solid 1.8% q/q growth rate in Q1 2010, beating consensus for 1.5% growth, and 0.2% in the previous quarter placing it up 7.8% on an annual basis. The Korean manufacturing sector saw strength driven by the electronics sector (likely a product of an export recovery, partially driven by restocking, and partially by normalization of demand for what have now become staples). It also noted strength in civil engineering driven construction (stimulus?), so a pretty typical pattern as far as economic recoveries go at the moment. Overall a good result, and well, a pretty good outlook too.
3. US housing market and consumer confidence
I also made a more detailed update on US housing and confidence earlier this week, but here's an experimental chart I threw together. It shows confidence tracking against the Case Shiller house price index. Now I know the short-comings of doing year on year percent changes when there are large variances e.g. at the peak of the crisis/crash, but it is an interesting relation. It's pretty obvious in terms of causality - house price levels are of course going to impact on consumer confidence; that's probably the main source of cause... but then there will be some reverse causality from consumer confidence as higher levels of confidence may signal a higher willingness and ability to buy houses and thus result in higher demand... I'll be tracking this chart over the year as more data comes in, early days to draw significant conclusions as yet.
4. Japanese unemployment and in(de)flation
Japan is continuing its struggle with deflation, in March Japan saw its 14th month of deflation, with CPI down -1.2% y/y vs -1.1% in Feb. Meanwhile in unemployment, after hitting a high of 5.6%, the jobless rate fell to 4.9% but then basically went sideways and up slightly in March with 5.0%, as employers are still reluctant to hire in Japan in spite of an export-led recovery. Thus things aren't looking too rosy at the moment in Japan, especially when you consider the fiscal situation (and particularly in that sense when you think about what's going on elsewhere in the world on the fiscal front). Interestingly, the Bank of Japan governor at the monthly meeting proposed a new venture capital type funding scheme as it runs out of options for combating deflation and encouraging growth.
5. Monetary policy review
On the monetary policy front this week it would have been boring were it not for 2 of the BRICs. The US held at 0.25% and signaled no change, the Bank of Japan held at 0.10% and signaled no change, and New Zealand held at 2.50% but signaled for an increase in the very near term. On to the emerging markets, Brazil lifted the selic 75bps to 9.50% in order to stem rising inflation and concerns about overheating as the Brazilian economy makes a strong recovery. Meanwhile Russia cut the refi another 25bps to 8.00% with the intention of stimulating loan growth, opting to prioritize sustaining growth over stemming inflation.
Summary
So this week we had another two positive GDP results, with the South Korean economy showing much more health and promising signs than the US, but positive on both accounts nonetheless. In terms of the "where to next", the answer would be tentatively more growth. But as always, in these times the caveat of "risks remain" must be firmly noted; there are still significant potential global risks that may spillover and derail the global economy, there's also the chance that the US economic recovery doesn't gain significant wind. But all in all, the most likely scenario is for more growth, but almost certainly sub-trend, in this sub-dued recovery.
On Japan, well, there is upside there, but when you compare it to the US, there's probably a higher degree and probability of risks materializing to derail its fragile recovery. But it is still the 2nd/3rd largest economy, and a technological leader, they may yet pull through, but a key driver of that would be a continued and strong recovery in international trade.
On monetary policy and exit strategies, Brazil certainly stepped up its stimulus exit - and rightfully so. But with Russia, the opposite path was taken, but potentially rightfully so also. As for the rest, they're probably on the right path, New Zealand will almost certainly increase rates in the next month or two. So in terms of exit strategies, the balance of 'too late' and 'too soon' is being finely weighed, and as we're seeing; while the stimulus (and recession) was synchronized, the exit (and recovery) will vary in degree and timing.
Sources
1. US Bureau of Economic Analysis www.bea.gov
2. Bank of Korea eng.bok.or.kr
3. Conference Board www.conference-board.org Standard & Poors www.standardandpoors.com
4. Trading Economics www.tradingeconomics.com
5. Various central bank websites
Article Source: http://www.econgrapher.com/top5graphs1may.html
1. US GDP
The US unsurprisingly pulled through some growth again in the first quarter of 2010 with an annualised 3.2% (i.e. actually 0.8% q/q) against consensus for 3.4%, and previous of 5.6%. Year on year growth moved up to 2.5% vs 0.1% in Q4 09. There are some interesting signs in this result compared to the previous one; December was all about the inventory cycle, but this quarter we're seeing strength in consumption (3.6% vs 1.6%), and continued strength in real business investment i.e. equipment and software as opposed to buildings (13.4% vs 19%). But net exports were down with imports growing faster than exports, also government consumption expenditure dropped off again. So while the figure came in slightly under there are some vaguely positive signs in there for now...
2. South Korean GDP
As mentioned the other day South Korea announced its GDP results with a solid 1.8% q/q growth rate in Q1 2010, beating consensus for 1.5% growth, and 0.2% in the previous quarter placing it up 7.8% on an annual basis. The Korean manufacturing sector saw strength driven by the electronics sector (likely a product of an export recovery, partially driven by restocking, and partially by normalization of demand for what have now become staples). It also noted strength in civil engineering driven construction (stimulus?), so a pretty typical pattern as far as economic recoveries go at the moment. Overall a good result, and well, a pretty good outlook too.
3. US housing market and consumer confidence
I also made a more detailed update on US housing and confidence earlier this week, but here's an experimental chart I threw together. It shows confidence tracking against the Case Shiller house price index. Now I know the short-comings of doing year on year percent changes when there are large variances e.g. at the peak of the crisis/crash, but it is an interesting relation. It's pretty obvious in terms of causality - house price levels are of course going to impact on consumer confidence; that's probably the main source of cause... but then there will be some reverse causality from consumer confidence as higher levels of confidence may signal a higher willingness and ability to buy houses and thus result in higher demand... I'll be tracking this chart over the year as more data comes in, early days to draw significant conclusions as yet.
4. Japanese unemployment and in(de)flation
Japan is continuing its struggle with deflation, in March Japan saw its 14th month of deflation, with CPI down -1.2% y/y vs -1.1% in Feb. Meanwhile in unemployment, after hitting a high of 5.6%, the jobless rate fell to 4.9% but then basically went sideways and up slightly in March with 5.0%, as employers are still reluctant to hire in Japan in spite of an export-led recovery. Thus things aren't looking too rosy at the moment in Japan, especially when you consider the fiscal situation (and particularly in that sense when you think about what's going on elsewhere in the world on the fiscal front). Interestingly, the Bank of Japan governor at the monthly meeting proposed a new venture capital type funding scheme as it runs out of options for combating deflation and encouraging growth.
5. Monetary policy review
On the monetary policy front this week it would have been boring were it not for 2 of the BRICs. The US held at 0.25% and signaled no change, the Bank of Japan held at 0.10% and signaled no change, and New Zealand held at 2.50% but signaled for an increase in the very near term. On to the emerging markets, Brazil lifted the selic 75bps to 9.50% in order to stem rising inflation and concerns about overheating as the Brazilian economy makes a strong recovery. Meanwhile Russia cut the refi another 25bps to 8.00% with the intention of stimulating loan growth, opting to prioritize sustaining growth over stemming inflation.
Summary
So this week we had another two positive GDP results, with the South Korean economy showing much more health and promising signs than the US, but positive on both accounts nonetheless. In terms of the "where to next", the answer would be tentatively more growth. But as always, in these times the caveat of "risks remain" must be firmly noted; there are still significant potential global risks that may spillover and derail the global economy, there's also the chance that the US economic recovery doesn't gain significant wind. But all in all, the most likely scenario is for more growth, but almost certainly sub-trend, in this sub-dued recovery.
On Japan, well, there is upside there, but when you compare it to the US, there's probably a higher degree and probability of risks materializing to derail its fragile recovery. But it is still the 2nd/3rd largest economy, and a technological leader, they may yet pull through, but a key driver of that would be a continued and strong recovery in international trade.
On monetary policy and exit strategies, Brazil certainly stepped up its stimulus exit - and rightfully so. But with Russia, the opposite path was taken, but potentially rightfully so also. As for the rest, they're probably on the right path, New Zealand will almost certainly increase rates in the next month or two. So in terms of exit strategies, the balance of 'too late' and 'too soon' is being finely weighed, and as we're seeing; while the stimulus (and recession) was synchronized, the exit (and recovery) will vary in degree and timing.
Sources
1. US Bureau of Economic Analysis www.bea.gov
2. Bank of Korea eng.bok.or.kr
3. Conference Board www.conference-board.org Standard & Poors www.standardandpoors.com
4. Trading Economics www.tradingeconomics.com
5. Various central bank websites
Article Source: http://www.econgrapher.com/top5graphs1may.html
Wednesday, April 28, 2010
US House Prices and Confidence update
Here's a short sharp update on the US housing market, consumer confidence, and the direction of the US economy. The US S&P Case Shiller 20 Cities house price index rose 3% year on year in February, and was basically flat month on month. The figures indicate the housing market is still confused somewhat; consolidating before the next move... which could well be more sideways movement.
On a year over year basis (seasonally adjusted), San Francisco (12%), San Diego (7.6%), LA (5.4%), and Washington DC (5.1%) are up the most; while Las Vegas (-14.6%), Tampa (-6%), Seattle (-5.6%), Portland (-4.7%), are the laggards. The US housing market could yet stand to go through a prolonged period of stabilization or consolidation before returning to growth; thus it remains a key vulnerability for the US economic recovery.
Moving on to the other key data point; US consumer confidence showed a slight pick up coming in at 57.9 vs previous 52.5, and consensus for 53.5. On components the expectations index picked up to 77.4 from 70.4 in a promising move, likewise the current conditions index rose to 28.6 from 25.2. The move is also a milestone, being the highest since September 2008, which says a bit.
Outlook
In terms of implications for outlook, it depends how you read it. There are two obvious ways of looking at it; the first is that both the pattern of house prices and consumer confidence are consistent with a cyclical recovery, and that the recent uptick we are seeing in both of them points to an eventual cyclical economic recovery or rebound.
The other says on both counts we're basically set to see a prolonged period of consolidation and economic healing; consumer confidence remains low and the housing market remains subdued; as people spend less, pay down debt, try to get their jobs back, and rebuild wealth.
It's still hard to say just which one it is yet, but whichever one it turns out to be will have a huge bearing on the medium to long term pattern of growth in the US economy: structural recovery or cyclical recovery? sustainable recovery or a return to the vicious cycle?
Sources
Econ Grapher Analytics www.econgrapher.com
Conference Board www.conference-board.org
Standard & Poors www.standardandpoors.com
Article Source: http://www.econgrapher.com/28apr-ushousecon.html
On a year over year basis (seasonally adjusted), San Francisco (12%), San Diego (7.6%), LA (5.4%), and Washington DC (5.1%) are up the most; while Las Vegas (-14.6%), Tampa (-6%), Seattle (-5.6%), Portland (-4.7%), are the laggards. The US housing market could yet stand to go through a prolonged period of stabilization or consolidation before returning to growth; thus it remains a key vulnerability for the US economic recovery.
Moving on to the other key data point; US consumer confidence showed a slight pick up coming in at 57.9 vs previous 52.5, and consensus for 53.5. On components the expectations index picked up to 77.4 from 70.4 in a promising move, likewise the current conditions index rose to 28.6 from 25.2. The move is also a milestone, being the highest since September 2008, which says a bit.
OutlookIn terms of implications for outlook, it depends how you read it. There are two obvious ways of looking at it; the first is that both the pattern of house prices and consumer confidence are consistent with a cyclical recovery, and that the recent uptick we are seeing in both of them points to an eventual cyclical economic recovery or rebound.
The other says on both counts we're basically set to see a prolonged period of consolidation and economic healing; consumer confidence remains low and the housing market remains subdued; as people spend less, pay down debt, try to get their jobs back, and rebuild wealth.
It's still hard to say just which one it is yet, but whichever one it turns out to be will have a huge bearing on the medium to long term pattern of growth in the US economy: structural recovery or cyclical recovery? sustainable recovery or a return to the vicious cycle?
Sources
Econ Grapher Analytics www.econgrapher.com
Conference Board www.conference-board.org
Standard & Poors www.standardandpoors.com
Article Source: http://www.econgrapher.com/28apr-ushousecon.html
Tuesday, March 30, 2010
US Housing and Confidence Review
Ho-hum figures in US house prices and consumer confidence showed continued stabilization, and revealed vulnerabilities to the US economic recovery. In this update we look at the S&P Case Shiller house prices index numbers for January, and the Conference Board Consumer Confidence numbers for March. Both stats showed very slight improvements for their respective reported periods, but showed little cause for excitement really.
The Case-Shiller 20 City Composite Index came in virtually flat at 145.34 on a seasonally adjusted basis, up 0.3% from December and down -0.7% from January 2009. On a city by city basis the picture was relatively mixed with the top 3 year on year gains in San Francisco (9%), San Diego (5.9%), Washington (3.5%); with the worst 3 falls in Las Vegas (-17.4%), Detroit (-7.4%), and Tampa (-7.4%).
The figure added to a picture of temporary improvement driven by a drop off in construction, low interest rates, and government incentives. However it is likely that this has just been window of improvement, and there is a chance that prices will - best case move sideways - or see further falls as interest rates inevitably start climbing again; foreclosures rise, and unemployment remains persistently high. Housing is still a key vulnerability for the US economic recovery.
Meanwhile consumer confidence recorded another month of "stabilisation" in March, coming in at 52.5, beating consensus of 51 and February's drop to 46. On components the Present Conditions Index improved to 26.0 from 21.7, and the Expectations Index climbed to 70.2 from 62.9 in the previous month. In a potential slight plus for Non-farm Payrolls on Friday, those saying jobs are "hard to get" fell to 45.8 from 47.3, and those saying jobs are "plentiful" crept up to 4.4 form 4.0.
Lynn Franco, Director of The Conference Board Consumer Research Center noted: "...despite this month’s increase, consumers continue to express concern about current business and labor market conditions. And, their outlook for the next six months is still rather pessimistic. Overall, consumer confidence levels have not changed significantly since last spring."
Basically Consumer Confidence is still treading water at levels well below pre-crisis. There will probably need to be a substantial improvement in employment before consumer confidence can recover (i.e. start making ground instead of stagnating around 50).
Summary
Overall the housing and confidence figures show a picture of continued stabilization and consolidation, and raise the question of "where to next?". Consumer confidence will likely eventually begin to pick up as the recovery continues through this year, but will depend to a large degree on the health of the labour market. One positive to take from Consumer Confidence is that the future expectations index is relatively strong. However when you consider housing, the picture is still quite mixed, and this one will be interesting to watch as the year unfolds. The temporary impulses that stopped the gains and helped see a short-term recovery have now started to wane, and the likely course from here is sideways or down. All said the numbers today are pretty ho-hum.
Sources:
Econ Grapher Analytics www.econgrapher.com
The Conference Board www.conference-board.org
Standard & Poor's www.standardandpoors.com
Article source: http://www.econgrapher.com/31mar-ushouseconcon.html
The Case-Shiller 20 City Composite Index came in virtually flat at 145.34 on a seasonally adjusted basis, up 0.3% from December and down -0.7% from January 2009. On a city by city basis the picture was relatively mixed with the top 3 year on year gains in San Francisco (9%), San Diego (5.9%), Washington (3.5%); with the worst 3 falls in Las Vegas (-17.4%), Detroit (-7.4%), and Tampa (-7.4%).
The figure added to a picture of temporary improvement driven by a drop off in construction, low interest rates, and government incentives. However it is likely that this has just been window of improvement, and there is a chance that prices will - best case move sideways - or see further falls as interest rates inevitably start climbing again; foreclosures rise, and unemployment remains persistently high. Housing is still a key vulnerability for the US economic recovery.
Meanwhile consumer confidence recorded another month of "stabilisation" in March, coming in at 52.5, beating consensus of 51 and February's drop to 46. On components the Present Conditions Index improved to 26.0 from 21.7, and the Expectations Index climbed to 70.2 from 62.9 in the previous month. In a potential slight plus for Non-farm Payrolls on Friday, those saying jobs are "hard to get" fell to 45.8 from 47.3, and those saying jobs are "plentiful" crept up to 4.4 form 4.0.
Lynn Franco, Director of The Conference Board Consumer Research Center noted: "...despite this month’s increase, consumers continue to express concern about current business and labor market conditions. And, their outlook for the next six months is still rather pessimistic. Overall, consumer confidence levels have not changed significantly since last spring."
Basically Consumer Confidence is still treading water at levels well below pre-crisis. There will probably need to be a substantial improvement in employment before consumer confidence can recover (i.e. start making ground instead of stagnating around 50).
Summary
Overall the housing and confidence figures show a picture of continued stabilization and consolidation, and raise the question of "where to next?". Consumer confidence will likely eventually begin to pick up as the recovery continues through this year, but will depend to a large degree on the health of the labour market. One positive to take from Consumer Confidence is that the future expectations index is relatively strong. However when you consider housing, the picture is still quite mixed, and this one will be interesting to watch as the year unfolds. The temporary impulses that stopped the gains and helped see a short-term recovery have now started to wane, and the likely course from here is sideways or down. All said the numbers today are pretty ho-hum.
Sources:
Econ Grapher Analytics www.econgrapher.com
The Conference Board www.conference-board.org
Standard & Poor's www.standardandpoors.com
Article source: http://www.econgrapher.com/31mar-ushouseconcon.html
Saturday, August 29, 2009
Top 5 graphs of the week
Econ Grapher's Top 5 Graphs of the Week
There were a number of interesting data releases over the week, this article (the first in the series) sets out some of the more interesting graphs that were either updated, featured, or just generally of interest in the context of the week that was. In this article I show you graphs on US house prices, US consumer confidence, Japanese exports, Chinese loan growth, and a snapshot of US markets year to date. Enjoy, and be sure to look out for next week's top 5 finance and economics graphs of the week.
1. Green shoots in house prices?
This one paints a good picture of the US housing market, if you look carefully you can see what may be a tiny green shoot on the monthly % change data (but then it's not too hard to record gains when you've fallen that hard for that long).
2. US Consumer Confidence, or (still) Lack Thereof
The US consumer has become a little more confident, but sadly is still very depressed. With the high jobless rate, low house prices, questionable market outlook, and GDP record, it's hard to stay positive - but at least you can (*could) trade that clunker in for a new car.
3. Japanese Exports - Down, way Down, but not out yet
Were it not for China this chart may well look even poorer, Japan's exports have been hit hard - they're at low levels not seen since about 10 years ago. No surprise. The only good thing to say about this chart is the slight and gradual pick up in recent months, still it's likely a long hard road out.
4. China's Rapid Loan Growth
Beijing said to its banks that it wanted them to lend at least 5 trillion yuan in new loans - the total new loans in July YTD was about 7 trillion. This is fascinating in the global context - Russia's banks have completely tightened up, and in most western countries it is still very hard to get a loan (as well, there is less demand for loans as deleveraging is the word du jour). So it is unique and mostly state driven, and it is having a positive impact (on stock prices and property prices), and is among the factors that are helping China buy time while the rest of the world recovers... Next week I'll include a chart on China's money supply.
5. US Markets Year to Date... Draw your own conclusion!
I will let you draw your own conclusions, but I will give some context. The data is indexed at 100 at the start of the year, and I've used weekly % changes for the relevant closing metric. AIG is adjusted for the rejiggering of the shares on issue. The main indices give you a feel for the overall market sentiment, the interest rate gives you a feel for the inflation outlook and panic level (low i-rate means lots of buying i.e. lots of shelter seeking), and AIG and C give you a feel for relative optimisim (i.e. low prices on these two indicate a feeling that doom has not yet passed versus swing for the fences - we're out of the woods).
There were a number of interesting data releases over the week, this article (the first in the series) sets out some of the more interesting graphs that were either updated, featured, or just generally of interest in the context of the week that was. In this article I show you graphs on US house prices, US consumer confidence, Japanese exports, Chinese loan growth, and a snapshot of US markets year to date. Enjoy, and be sure to look out for next week's top 5 finance and economics graphs of the week.
1. Green shoots in house prices?
This one paints a good picture of the US housing market, if you look carefully you can see what may be a tiny green shoot on the monthly % change data (but then it's not too hard to record gains when you've fallen that hard for that long).2. US Consumer Confidence, or (still) Lack Thereof
The US consumer has become a little more confident, but sadly is still very depressed. With the high jobless rate, low house prices, questionable market outlook, and GDP record, it's hard to stay positive - but at least you can (*could) trade that clunker in for a new car.3. Japanese Exports - Down, way Down, but not out yet
Were it not for China this chart may well look even poorer, Japan's exports have been hit hard - they're at low levels not seen since about 10 years ago. No surprise. The only good thing to say about this chart is the slight and gradual pick up in recent months, still it's likely a long hard road out.4. China's Rapid Loan Growth
Beijing said to its banks that it wanted them to lend at least 5 trillion yuan in new loans - the total new loans in July YTD was about 7 trillion. This is fascinating in the global context - Russia's banks have completely tightened up, and in most western countries it is still very hard to get a loan (as well, there is less demand for loans as deleveraging is the word du jour). So it is unique and mostly state driven, and it is having a positive impact (on stock prices and property prices), and is among the factors that are helping China buy time while the rest of the world recovers... Next week I'll include a chart on China's money supply.5. US Markets Year to Date... Draw your own conclusion!
I will let you draw your own conclusions, but I will give some context. The data is indexed at 100 at the start of the year, and I've used weekly % changes for the relevant closing metric. AIG is adjusted for the rejiggering of the shares on issue. The main indices give you a feel for the overall market sentiment, the interest rate gives you a feel for the inflation outlook and panic level (low i-rate means lots of buying i.e. lots of shelter seeking), and AIG and C give you a feel for relative optimisim (i.e. low prices on these two indicate a feeling that doom has not yet passed versus swing for the fences - we're out of the woods).
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