Presentation referenced by Richard Yamarone of the Bloomberg Economic BRIEF, at the 2012 Texas Financial Market Roundtable sponsored by Professor Lewis Spellman at the McCombs School of Business, The University of Texas at Austin. Mr. Yamarone is the author of "The Trader's Guide to Key Economic Indicators."
HARNESSING AI FOR ENHANCED MEDIA ANALYSIS A CASE STUDY ON CHATGPT AT DRONE EM...
Richard Yamarone Economic Indicators to Watch
1. Economic Indicators to Watch
What Are the Odds of a 2012 Recession?
New York, NY
Monday, June 4, 2012
Richard Yamarone
Bloomberg Economic BRIEF
Author of “The Trader’s Guide to Key Economic Indicators”
Richard Yamarone, ryamarone@bloomberg.net, TEL: 212-617-8737 Twitter: @Yamarone
2. Economy Isn’t Advancing Fast Enough to Engender Job Creation
Nonfarm Payrolls vs. Real GDP
Payrolls ('000) GDP YOY%
1200 6
5
800
4
400 3
2
0
1
-400 0
-800 -1
-2
-1200
-3
-1600 -4
NFP (lhs) GDP (rhs) -5
-2000
-6
-2400 -7
'85 '87 '89 '91 '93 '95 '97 '99 '01 '03 '05 '07 '09 '11
Source: BEA, BLS, Bloomberg
Richard Yamarone, ryamarone@bloomberg.net, TEL: 212-617-8737
3. Economy Operating Well Below its Potential
Real GDP (Blns) vs. Real Potential GDP (Blns)
$14,500
$13,500
$12,500
$11,500
Potential GDP
$10,500
Real GDP
$9,500
$8,500
$7,500
$6,500
CBOPGDPR <Index>, GDP CHWG <Index>
$5,500
1980 1985 1990 1995 2000 2005 2010 2015
Source: BEA, CBO, Bloomberg
Richard Yamarone, ryamarone@bloomberg.net, TEL: 212-617-8737
4. Employment To Be a Slow Train Coming
Nonfarm Payroll Creation From Onset of Recession
102
100
98
'73 - '75
96 1980
'81 - '82
94
'90 - '91
92 2001
'07 - current
90
1 5 9 13 17 21 25 29 33 37 41 45 49 53
Source: BLS, NBER, Bloomberg Months
Richard Yamarone, ryamarone@bloomberg.net, TEL: 212-617-8737
5. Employment To Be a Slow Train Coming -- II
peak-to-trough % jobs lost
Recession Date (months) total jobs lost (millions) months to job restoration peak-to-trough
Period 1 1948-49 11 2.34 22 5.17
1953-54 10 1.71 23 3.33
1957-58 8 2.22 20 4.17
1960-61 10 1.19 20 2.16
1969-70 11 1.04 18 1.46
1973-75 16 2.17 19 2.70
1980 6 1.16 10 1.20
1981-82 16 2.84 28 3.09
AVG: 11 1.83 20 2.91
Period 2 1990-91 8 1.62 32 1.40
2001 8 2.71 48 2.04
AVG: 8 2.16 40 1.72
Period 3 2007-09 (current) 18 8.31 ? 6.03
Richard Yamarone, ryamarone@bloomberg.net, TEL: 212-617-8737
6. No Hiring by the Private Sector
Unemployed Workers per Job Opening
Total Private Hires, (thousands) 8
5,500
7
6
5,000
5
4,500 4
3
4,000
2
3,500 1
shaded areas are
0
3,000 2001 2003 2005 2007 2009 2011
2001 2003 2005 2007 2009 2011
Source: BLS, NBER, JOLTTOTL , USUETOT
Source: BLS, Bloomberg HIREPRIV
Richard Yamarone, ryamarone@bloomberg.net, TEL: 212-617-8737
7. No Words to Express this Stat
Average Duration of Unemployment in Weeks
45.0
40.0
35.0
30.0
25.0
20.0
15.0
10.0
5.0
0.0
1948 1958 1968 1978 1988 1998 2008
Source: Bureau of Labor Statistics USDUMEAN <Index>
Richard Yamarone, ryamarone@bloomberg.net, TEL: 212-617-8737
8. Little “Improvement” in Unemployment Benefit Claims
Continuing, Emergency, and Extended Jobless Benefits ('000)
12,000
10,000
8,000
6,000
4,000
2,000
0
2000 2002 2004 2006 2008 2010 2012
Source: U.S. Department of Labor INJCEUC, INJCEXB, INJCSP
Richard Yamarone, ryamarone@bloomberg.net, TEL: 212-617-8737
9. Little Signs of Recovery…
Richard Yamarone, ryamarone@bloomberg.net, TEL: 212-617-8737
10. Trusted Street Indicator Signaled ‘Double-Dip’
ECRI Weekly Leading Index
Smoothed Growth Rate (%)
30
20
10
0
-10
-20
-30
1990 1995 2000 2005 2010
Source: ECRI, Bloomberg ECRWGROW <Index> <GO>
Richard Yamarone, ryamarone@bloomberg.net, TEL: 212-617-8737
11. Economy Set for An ‘About-Face’
Leading Economic Indicators (Y/Y%)
vs. Real GDP Growth (Y/Y%)
8 12
10
6 8
6
4 4
2
2
0
-2
0
-4
-6
-2
-8
-4 -10
Series2 -12
-6 -14
LEI (rhs) GDP CYOY <Index> <GO>, LEI TOTL <Index> <GO> -16
-8 -18
'85 '95 '05
Source: Bureau of Economic Analysis, The Conference Board
Richard Yamarone, ryamarone@bloomberg.net, TEL: 212-617-8737
12. If GDP Dips to 2.0% -- It’s Recession Time
Real GDP (Y/Y %)
14
12
10
8
6
4
2
0
-2
-4
-6
1948 1953 1958 1963 1968 1973 1978 1983 1988 1993 1998 2003 2008
Source: NBER, BEA, Bloomberg GDP CYOY <Index>
Richard Yamarone, ryamarone@bloomberg.net, TEL: 212-617-8737
13. Robust Fed Index Points to Sub-Par Performance
Chicago Fed National Activity Index
Three Month Moving Average
1.00
0.50
0.00
-0.50
-1.00
-1.50
-2.00
-2.50
-3.00
-3.50
-4.00
'90 '93 '96 '99 '02 '05 '08 '11
Source: Federal Reserve Bank of Chicago CFNAI <Index>
Richard Yamarone, ryamarone@bloomberg.net, TEL: 212-617-8737
14. Economic Deceleration Occurred During Early June
Real GDP (Y/Y%) vs. Railcar Loads of Waste/Scrap (Y/Y%)
40 8.00
30
6.00
20
4.00
10
0 2.00
-10 0.00
-20
-2.00
-30 Railcar Loads (lhs)
Real GDP (rhs) -4.00
-40
RAILWAST <Index>
-50 -6.00
1994 1996 1998 2000 2002 2004 2006 2008 2010 2012
Source: Association of American Railroads, BEA, Bloomberg
Richard Yamarone, ryamarone@bloomberg.net, TEL: 212-617-8737
15. Manufacturing Gains Not Generating Jobs
Industrial Production Index, Manufacturing Jobs ('000)
20,000 105
100
18,000
95
16,000
90
14,000
85
12,000
80
10,000
75
Mfg Jobs (lhs) IP (rhs)
8,000 70
1995 2000 2005 2010
Source: Federal Reserve, BLS USMMMANU <Index>, IP <Index>
Richard Yamarone, ryamarone@bloomberg.net, TEL: 212-617-8737
16. It’s 1941 For Manufacturing
U.S. Manufacturing Employment
(in thousands)
20,000
19,000
18,000
17,000
16,000
15,000
14,000
13,000
12,000
11,000
10,000
1940 1950 1960 1970 1980 1990 2000 2010
Source: Bureau of Labor Statistics USMMMANU <Index>
Richard Yamarone, ryamarone@bloomberg.net, TEL: 212-617-8737
17. Won’t Get Any Jobs from Housing
Residential Construction Spending ($ mls)
Construction Employment (thousands)
700,000 8,000
600,000 7,500
Spending (lhs) Construction Jobs (rhs)
7,000
500,000
6,500
400,000
6,000
300,000
5,500
200,000 USECTOT <Index>, CNSTRESI <Index>
5,000
100,000 4,500
Source: U.S. Department of Commerce, Bureau of Labor Statistics, Bloomberg
0 4,000
1993 1997 2001 2005 2009
Richard Yamarone, ryamarone@bloomberg.net, TEL: 212-617-8737
18. This is what the Fed is Trying to Revive?
Residential Investment as a Percent of GDP (%)
8
7
6
5
4
3
2
1947 1954 1961 1968 1975 1982 1989 1996 2003 2010
Source: BEA PFIVRESI <Index>, GDP CUR$ <Index>
Richard Yamarone, ryamarone@bloomberg.net, TEL: 212-617-8737
20. Home Prices Falling Again
S&P-Case-Shiller Home Price Index AZ-Phoenix
300 CA-Los Angeles
CA-San Diego
CA-San Francisco
CO-Denver
250
DC-Washington
FL-Miami
FL-Tampa
200 GA-Atlanta
IL-Chicago
MA-Boston
MI-Detroit
150
MN-Minneapolis
NC-Charlotte
NV-Las Vegas
100
NY-New York
OH-Cleveland
Source: S&P/Case-Shiller OR-Portland
50 TX-Dallas
2000 2002 2004 2006 2008 2010 2012 WA-Seattle
Richard Yamarone, ryamarone@bloomberg.net, TEL: 212-617-8737
21. Commercial Construction Slump
Total U.S. Commercial Construction Spending ($ mlns)
$100,000
$90,000
$80,000
$70,000
$60,000
$50,000
$40,000
$30,000
$20,000
1993 1996 1999 2002 2005 2008 2011
Source: U.S. Census Bureau CNSTCOMM <Index>
Richard Yamarone, ryamarone@bloomberg.net, TEL: 212-617-8737
22. Retailers Headed Out of the Malls
Regional & Strip Mall Vacancies
12.0%
11.0%
Strip Mall Regional & Superregional Malls
10.0%
9.0%
Source: Reis Inc.
8.0%
7.0%
6.0%
5.0%
4.0%
2000 2003 2006 2009
Richard Yamarone, ryamarone@bloomberg.net, TEL: 212-617-8737
23. State & Local Governments May be a Ticking Time Bomb
State & Local Government Employment (in thousands)
14,800 5,250
14,600 5,200
5,150
14,400
5,100
14,200
5,050
14,000
5,000
13,800
4,950
13,600
4,900
Local (lhs)
13,400
4,850
State (rhs)
13,200 4,800
13,000 4,750
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Source: BLS USEGSTSA <Index>, USEGLCSA <Index>
Richard Yamarone, ryamarone@bloomberg.net, TEL: 212-617-8737
25. Bloomberg Orange Book
Summary of Commentary on ____________________
Current
Economic
Conditions
By Corporation
NI ORANGEBOOK <GO>
from earning statements commencing July 1, 2010
Richard Yamarone, ryamarone@bloomberg.net, TEL: 212-617-8737
26. What is Being Said…
“And so we're still seeing that midnight shopping in our stores when that EBT card, it's like a
debit card, when it is ready and it is funded, there are people who are in the store at
midnight because they know it turns on. And they have shopped from like 10:45 to midnight
and they're waiting for that card and then our lines open up. And we've had some of our
busiest ours at midnight.”
Rosalind Brewer, EVP, Wal-Mart April 12, 2011
“I think the most telling indicator for us that economic weakness and employment is the key
issue driving soft volumes, is the fact that we continue to see, as – in contrast to the historical
norms, we continue to see volume pick up heavily at the beginning of each month, and then
steadily erode through the month, being particularly soft in the last week to 10 days of the
month. That just tells us that people are running out of money.”
Gregg Engles, CEO Dean Foods May 10, 2011
“Now clearly when it gets to the end of the month and they've run out of dollars and the
first of month gets there, you'll see some pick-up in sales. I would say it's not as dramatic as
it was two years ago due mostly to the fact that not 100% of those benefits are getting
loaded on to people's cards..”
J. Michael Schlotman, CFO, SVP Kroger May 17, 2011
Richard Yamarone, ryamarone@bloomberg.net, TEL: 212-617-8737
27. It Pays to Read those 200 Transcripts…
Fed Ex Total US Package Shipments (Y/Y%) vs. Real GDP (Y/Y%)
GDP Packages
8.00 10.00
6.00
5.00
4.00
0.00
2.00
0.00
-5.00
-2.00
-10.00
-4.00 GDP (lhs) Fed Ex Shipments (rhs)
-6.00 -15.00
1999 2001 2003 2005 2007 2009 2011
Source: Federal Express, Bureau of Economic Analysis
Richard Yamarone, ryamarone@bloomberg.net, TEL: 212-617-8737
28. Not Enough Fuel in the Tank
Real Disposable Personal Incomes (Y/Y%)
8.00
6.00
4.00
2.00
0.00
-2.00
-4.00
-6.00
1990 1995 2000 2005 2010
Source: Bureau of Economic Analysis
Richard Yamarone, ryamarone@bloomberg.net, TEL: 212-617-8737
29. Not Enough Fuel in the Tank -- II
Average Hourly Earnings (Y/Y%) by Industry
Other Services
Lesiure & Hospitality
Education & Health
Professional business svcs.
Financial Activities
Information
Utilities
Transportation & warehousing
Retail Trade
Wholesale Trade
Manufacturing
PCED Inflaton 2.14%
Construction
Mining & Logging
-1.0 0.0 1.0 2.0 3.0 4.0 5.0
Source: Bureau of Labor Statistics
Richard Yamarone, ryamarone@bloomberg.net, TEL: 212-617-8737
30. What Happens When the Stimulus Ends?
Government Stimulus Driving Incomes
Incomes in $ billions
$10,500
$10,000
Real Dis Pers Inc Real Pers Inc Ex-Transfers
$9,500
$9,000
$8,500
Source: BEA, Federal Reserve Bank of St. Louis, Bloomberg
$8,000
2000 2002 2004 2006 2008 2010 2012
PIDSDCWT <Index>, PIDSPINX <Index>
Richard Yamarone, ryamarone@bloomberg.net, TEL: 212-617-8737
31. Recession Comparison of Real Incomes
Real Incomes Ex-Transfers From Onset of Recession
106
104
102
100
98
96
'73 - '75 1980
94
'81 - '82 '90 - '91
92
90
2001 '07 - current
88
1 5 9 13 17 21 25 29 33 37 41 45 49
Source: BLS, NBER, Bloomberg Months
Richard Yamarone, ryamarone@bloomberg.net, TEL: 212-617-8737
32. Collapse In Credit Card Debt, Still Uncertain
Monthly Change in Consumer Revolving Debt ($ billions)
10
8
6
4
2
0
-2
-4
-6
-8
-10
-12
2007 2008 2009 2010 2011 2012
Source: Federal Reserve CICRRRTL <Index>
Richard Yamarone, ryamarone@bloomberg.net, TEL: 212-617-8737
33. Persons Receiving Food Stamps at All-Time High
Supplemental Nutrition Assistance Program
Number of Participants
50,000,000
45,000,000
40,000,000
35,000,000
30,000,000
25,000,000
2007 2008 2009 2010 2011
Source: U.S.D.A, Bloomberg FDS PNUM <Index>
Richard Yamarone, ryamarone@bloomberg.net, TEL: 212-617-8737
34. There is No Holy Grail of Economic Indicators
Richard Yamarone, ryamarone@bloomberg.net, TEL: 212-617-8737