Business-Cycle Conditions

Friday, October 19th, 2018

Modern central banking claims to make the money supply more elastic to stabilize the economy. The rationale says that left to itself, the market economy is unstable. Yet the evidence suggests the opposite: that modern central banking is the main culprit for boom and bust.

Wednesday, October 17th, 2018

The housing market appears to be struggling with a combination of elevated home prices and rising interest rates. With interest rates likely to drift even higher over coming months and quarters, the outlook for housing is cautious. 

Tuesday, October 16th, 2018

The latest data from the Bureau of Labor Statistics shows a surge in job openings in August, to 7.136 million, while private sector job openings totaled 6.464 million. Both are at new all-time highs.

Monday, October 15th, 2018

The next financial crisis is just around the corner. It is only a matter of time until once again the world economy will be shocked by a massive contraction of liquidity. All markets are linked, and the origin of a new crisis can come from anywhere. A global financial crisis is the result of an interplay between domestic and external factors. The drama has many players and none of them is innocent.

Tuesday, October 9th, 2018

Historically, unsustainable debt service levels and distorted commercial decision-making are frequently precipitated by artificially low interest rates.

Friday, October 5th, 2018

The impact of Hurricane Florence was evident in the September employment report as nonfarm payrolls rose just 134,000. However, the preponderance of data suggests the labor market remains robust and that the economy is likely to grow at a healthy pace.

Thursday, October 4th, 2018

The latest monthly reports from the Institute for Supply Management show that the economy continued to expand at a robust pace in September. Details in both reports were decisively positive and suggest strong, broad-based growth in the economy.

Tuesday, October 2nd, 2018

The essence of economics is far too complex to accredit to a politician.

Friday, September 28th, 2018

Personal income and consumer spending are up 5.3 percent over the past year. Together, these support a positive outlook for the economy with a low probability of recession over the next several months and quarters. 

Thursday, September 27th, 2018

New orders for durable goods jumped 4.5 percent in August while orders excluding aircraft increased 1.4 percent to a new record. Today’s reports suggest that demand remains strong and that the broader economy is maintaining solid momentum in the second half of 2018.

Wednesday, September 26th, 2018

Sales of new single-family homes rose 3.5 percent in August and are up 12.7 percent from a year ago, however, they are down 11.7 percent from November 2017. Declining affordability suggests that sales are unlikely to move significantly higher in the coming months.

Thursday, September 20th, 2018

Two surveys on manufacturing showed positive results in September. However significant concerns remain regarding the tight labor market and rising input-cost pressures.

Wednesday, September 19th, 2018

Housing starts rose by 9.2 percent in August. However, housing permits, an indicator of future activity, fell in the latest month, hitting the lowest level since August 2016. Combined with rising interest rates and falling affordability, the outlook for housing is deteriorating.

Wednesday, September 19th, 2018

The most well-known of the movies on the 2008 financial crisis is also the weakest. On the other hand, there are two wonderful films about it that deal with both the difficult times for traders and the underlying causes.

Friday, September 14th, 2018

Consumer Sentiment jumped in early September while retail sales and industrial production both posted modest gains though with mixed results among the details. Overall, the three reports suggest solid growth trends, supporting a positive outlook.

Friday, September 14th, 2018

"Karl Marx gave the world the myth that economic crises are inherent to capitalism. Yet overwhelming evidence says they result from war and political unrest, or come from natural events." ~ Antony Mueller

Tuesday, September 11th, 2018

The small-business-optimism index from the National Federation of Independent Business jumped to 108.8 in August, a new all-time high. Job openings also reached a new all-time high. Combined, these reports indicate on-going economic strength and support a positive outlook over the coming months and quarters.

Tuesday, September 11th, 2018

"A crucial reason why monetary and fiscal planners fail traces to the indicators they use as the signposts for what they may need to do are themselves false signals hiding from view the reality of the complex market system." ~ Richard Ebeling 

Friday, September 7th, 2018

U.S. nonfarm payrolls added 201,000 jobs in August bringing 12-month total to 2.33 million new jobs while hourly earnings rose 0.4 percent for a 12-month gain of 2.9 percent, the fastest since 2009. Broad-based gains in the labor market are providing support for consumer confidence, consumer spending, and the economy overall.

Thursday, September 6th, 2018

The ISM’s nonmanufacturing index rose to a reading of 58.5 from 55.7 in July. The results suggest the nonmanufacturing sector continued to grow in August. That performance is in line with the report for the manufacturing sector and other recent data that point to ongoing expansion for the overall economy.