Morning Report: Lots of economic data this morning 3/3/16

Stocks are slightly lower as a slew of economic data comes in this morning. Bonds and MBS are flattish.

Outplacement firm Challenger, Gray and Christmas reported that announced job cuts rose 21.8% in February to 61.6k. The energy sector accounted for 25k of the losses, followed by chemicals, computer, and industrial goods. The West and the Midwest bore the brunt of the cuts. Remember these are announced job cuts and often never actually happen. Overall, the employment picture is looking decent, however we’ll get a better look tomorrow.

Here is a table of the industries hit. Note that aside from energy, job cuts are pretty low. Note that these are not net numbers either – they don’t take into account any sort of hiring.

Initial Jobless Claims rose to 278k last week. Anything below 300k is a good number.

The ISM Non-manufacturing composite fell slightly to 53.4 in February from 53.5 in January. Business continues to be decent in the services sector.

Factory Orders fell 1.6% in January, while durable goods orders rose 4.7%. Capital Goods Orders rose 3.4%.

Why is wage growth so difficult to find? Productivity growth has been weak since peaking around 1999 – 2000. This was the tail end of the big boost from the Internet and the decade-long transformation of the PC into a tool on everyone’s desk. Last quarter it came in at -2.2%. Productivity has been negative for 3 out of the past 4 years, and that is not a recipe for wage inflation.

Unit Labor costs rose 3.3% in the fourth quarter, which drove the drop in productivity as output only increased 1%.

The Markit US Services PMI fell slightly in February to 49.7 while the composite PMI was flat at 50.

The Bloomberg Consumer Comfort Index fell to 43.6 from 44.2 last week. Falling perceptions of the economy drove the decline.

2012 Presidential Nominee Mitt Romney is going to try and push back the Trumpmentum with a speech tonight.

Nothing too earth-shattering in the Fed’s Beige Book which was released yesterday. Overall, manufacturing is flattish compared to last month, however labor markets improved overall, and “wage growth varied considerably, from flat to strong, across all districts.”

30 Responses

  1. Frist!

    Take that, KW!


  2. Not Frist.

    Liked by 1 person

  3. Odds that Gov Romney’s speech is going to do anything other than harden support for Mr Trump?


    • Zero or negative. He’s the perfect foil for Trump.

      Hell, it might increase Trump’s general election appeal.


    • Mich:

      Odds that Gov Romney’s speech is going to do anything other than harden support for Mr Trump?

      I’m not sure it can harden any more than it is already. But it is probably unlikely to have much of a negative effect on his support. They will probably dismiss whatever Romney says simply because Romney is saying it.

      It is somewhat interesting to me. In making the kind of appeal that Romney made today, he is showing a respect for Trump supporters that they probably don’t deserve, in that his appeal seems to assume that their support is based on a reasoned assessment of Trump’s beliefs and proposed policies, and so they might possibly be swayed by counter-arguments and truths about Trump himself. I think that is obviously a bad assumption.


      • Also, not without it’s own problems in this modern era:

        Romney thought Trump was awesome when Trump was endorsing him. Which makes the attack look like more of the GOP establishment attacking Trump and, by proxy, the base.


        • KW:

          Which makes the attack look like more of the GOP establishment attacking Trump

          It is that by definition. Romney is part of the establishment. I don’t think we need to see Romney graciously accepting Trump’s endorsement in 2012 for it to “look” like that.

          And it goes without saying, or ought to, that people who are rebelling against a perceived “establishment” will reject “establishment” arguments.

          But this is all more of the same thing I spoke of yesterday…a focus on tactics rather than substance. Every time an R politician stands up to criticize Trump, we hear how this is only going to help Trump. Maybe, but so what? Is there literally anything an “establishment” politician could possibly do or say that wouldn’t solidify Trump’s support among those who support him?

          If Romney was silent, would that hurt Trump? No. If Romney endorsed Trump, would that that hurt him? No. Really nothing Romney might do or say would detract from Trump’s support. So tactically whatever Romney might do is irrelevant (and, frankly, boring to me.) What is interesting, to me at least, is whether what Romney was saying is correct. It seems to me it was. And if his criticisms are correct, and such criticisms have no impact on Trump’s support, or worse actually tends to increase it, then that fact is more a reflection on Trump supporters than it is on Romney.

          It may be poor tactics to point out that certain voters are idiots, but that doesn’t make it untrue. And it may be tactically necessary to appeal to idiots in order to win elections, but I don’t find that fact enjoyable or something to be celebrated. I find it depressing.


        • Certain voters? More like most voters.


        • McWing:

          Certain voters? More like most voters.

          Even more depressing!


        • “It may be poor tactics to point out that certain voters are idiots”

          I actually don’t think that Trump voters are idiots. But they clearly aren’t Cruz style conservatives either.

          This is a good piece with some representative interviews:


        • jnc:

          I actually don’t think that Trump voters are idiots.

          I have recently been engaging some of them on a different comments board, and those particular ones are definitely idiots.

          I also think that anyone who is driven to vote for Trump because of Mitt Romney’s speech – which you acknowledge might well drive up Trump’s support – is an idiot.


      • @scottc1: “I think that is obviously a bad assumption.”

        Which would be typical of Romney, who seemed completely unaware of the optics of his dog story, or his history with Bain Capital. The dog story not withstanding, his record at Bain Capital is a case of a businessman successfully doing his job, although doing the job is not always pretty—yet he seemed completely unaware of how the optics would look on the campaign trail.

        Similarly, someone like Donald Trump, who is almost purely “optics”, is going to have to be an enigma to him.


      • They will probably dismiss whatever Romney says simply because Romney is saying it.

        That was my thought as well. I suspect the Venn diagram of Romney supporters and Trump supporters has zero overlap.


    • “Odds that Gov Romney’s speech is going to do anything other than harden support for Mr Trump?”

      Remember when Romney beat Obama and became president? Yeah, me neither. I think Romney is a yawner. It’s a “oh, he doesn’t like Trump either, who cares, what else is on”? It’s the balls-to-the-walls attacks that harden supporters, and comments like Viciente Fox’s that Trump reminds him of Hitler that are going to harder supporters and potentially attract new ones.

      I get a feeling a Trump presidency, should one happen, is going to be largely a matter of the pollsters being wrong about who constitutes a “likely voter” in this election cycle.


      • It’s perfect fodder for Trump’s story about politicians being bought and sold. Namely that Romney loved him when he needed his endorsement and money.

        Liked by 1 person

        • jnc:

          It’s perfect fodder for Trump’s story about politicians being bought and sold.

          You are probably right, but the idea of people who are outraged over money in politics latching on to Trump as the solution suggests to me, again, that they are idiots.


  4. The obtuseness of the establishment GOP and where votes come from neatly established:

    They think people have been showing up vote for the benefit of wealthy establishment politicians and for the pleasure of the conservative intelligentsia and pundit class.

    I cannot imagine a way in which an active pursuit of Kristol’s strategy has a positive outcome for the “establishment GOP”—certainly not the part of which Kristol is a member.


  5. Another thought about HRC and reluctant prosecutors: Petraeus substantively did something bad sharing highly classified troop movements and strategies with his sweetums. But he told all to the investigators. Ruined career, but a misdemeanor plea and no penalty to speak of.

    Whatever HRC’s email issues are she has to be forthcoming to the investigators. She would likely not be prosecuted [without any leak at all] if she tells the truth, although the justified criticism of her bad judgment may haunt her in the campaign. Even a lie about an immaterial fact could get her caught up in obstruction or false swearing, like Libby.


  6. This is funny. I got

    You are a married guy older than 32 who makes more than $52,000/year

    Which I’m pretty sure is not me. 😀


  7. I like Trump because he’s sophisticated:


  8. I finally watched the Jamie John Oliver piece. He’s definitely preaching to the choir, and I liked his take-down of FIFA more (even though I think I’ve watched maybe two soccer games in my whole life), but I thought it was pretty funny. Bad Lip Reading is, admittedly, funnier; I think Jamie John cares too much to be truly funny about a Trump candidacy.


    • John Oliver? I watched it, it’s a fine take down. I think the Drumpf thing is ultimately ineffective—entirely based around The Donald’s attack on John Stewart for changing his name and not being proud of his heritage.

      You were just supposed to know that, I think, in the context of the piece. Software that replaces “Trump” with “Drumpf” is a case of taking the joke one step too far. To me, but then I hate the whole “name” think. Your name is Barack Obama or President Obama? That’s what I’m calling you. Not “Obozo” and not “Barack Hussein Obama”. Nothing about the name “Drumpf” says anything about Trump . . . indeed, his own actions speak louder than words (that is, Trumps). I’ve enjoyed Oliver’s takedowns and I think despite his formulaic intermingling of jokes that sometimes hit and sometimes miss with real data, he does something John Stewart never did much of: a thorough discussion of things his audience is probably not very aware of. They might know they are too cool to be religious, but now what a scam setting up a church as a non-profit and using it to collect money from rubes is in the US. They might know that cops are being militarized or have too much power, but his takedown of how the police use confiscation as a revenue source as well as ticketing people in ways that they pay thousands for hundred dollar tickets and are forever trapped in paying extortion to the local constabulary . . . that’s good stuff. None of it may have a positive effect, ultimately, but his tie down of FIFA is likely to make way more a difference that his take down of “Drumpf”.

      Had a number of nascent millennials over as the house last night. Trump came up twice in conversation. Once, Jason (who is second-generation Chinese, if my memory serves) talked about going to the Trump rally down in Millington. It was a sea of rednecks, according to him, and a woman kept trying very hard to get him to hold an “I support Trump” sign for the cameras, basically, so in a sea of Tennessee rednecks and military families the one Asian guy could be used as proof of Donalds wide appeal. Jason, BTW, does not remotely support Donald: he’s a Bernie guy. He hasn’t quite accepted that the caucus system means that there’s almost no chance of Bernie getting the nomination, but . . .

      2nd time it came up was with a guy whose ethnicity I gotta admit I’m not 100% sure about . . . I believe he is from a Muslim family but they clearly aren’t remotely orthodox. In any case, he went off on Trump, complaining about how if Trump became president Trump would kick him out of the country (he’s also 2nd generation, I believe). Tried to explain a little bit of birthright citizenship, and also that schools do nothing to teach civics any more. Basically, the president isn’t a king and can’t just do that and, in fact, the powers of the president are in many ways fairly limited, and it’s unlikely Trump would accomplish very much of what he’s promising. Or that he’d try very hard, because he’s a poseur, not an ideologue.

      My oldest daughter likes Trump but I am 100% confident that means her boyfriend (African American but clearly heavily influenced by his redneck mother’s side, despite not liking his mother . . . it gets very complicated). Yet she seemed to have the greatest awareness of Trump’s actual policies (in so far as they have been articulated), which surprised me. We do not like the boyfriend (as I may have mentioned) because he’s an ass. But in some ways he’s a good influence on her. Doesn’t make up for the rest of it, but . . .

      I digress. Sufficed to say, both the left and right in this country have wrought the Trumpster, and they must now lie down upon the bed they have made for themselves. And I suppose I share some responsibility cuz I voted for Gary Johnson. But I hold myself mostly blameless. 😉


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