Robert Hughes joined AIER in 2013 following more than 25 years in economic and financial markets research on Wall Street. Bob was formerly the head of Global Equity Strategy for Brown Brothers Harriman, where he developed equity investment strategy combining top-down macro analysis with bottom-up fundamentals. Prior to BBH, Bob was a Senior Equity Strategist for State Street Global Markets, Senior Economic Strategist with Prudential Equity Group and Senior Economist and Financial Markets Analyst for Citicorp Investment Services. Bob has a MA in economics from Fordham University and a BS in business from Lehigh University.
Articles from Robert Hughes
The strength in the May Employment Report released this morning suggests the economy is rebounding from a confluence of negative forces including the rising dollar that hurts exporters, the plunge in crude oil prices that has hurt the energy industry, disruptions from the west coast port labor issues, and lingering effects from harsh winter weather that dragged down first quarter growth.
In February we analyzed the impact of the stronger dollar on the various sectors of the U.S. economy, as part of our new report, Business Conditions Monthly.
In it we noted, “The surging dollar may be a boon for consumers who reap the benefits of potentially cheaper imports, but it can be a burden for U.S. corporations.” This has proven to be true as the ensuing months unfolded.
The February employment report, released by the Labor Department this morning, was broadly strong, showing the economy added 295,000 jobs in February, helping to push the unemployment rate down to 5.5 percent. Other broader measures of unemployment rates fell as well. However, the participation rate also ticked down in February.
The Bureau of Economic Analysis this morning released a disappointing first estimate for the 2014 fourth-quarter real gross domestic product – the total value of this country’s finished goods and services. At 2.6 percent, it was roughly half of the 5.0 percent pace of growth in the third quarter. And it was about half a point below the consensus of analysts’ expectations.
But despite the disappointing headlines, there were a couple of positive points within the details.
The Great Recession of 2008-2009 will be remembered for its severity—a cumulative decline of 4.2 percent in real GDP, the loss of 8.7 million jobs, and a harsh toll on the banking system with more than 400 bank failures from 2008 to 2011. The Great Recession should also be remembered for the massive increase in the federal budget deficit it spawned.
As Labor Day marked the unofficial end of summer 2014 with backyard barbecues or long days at the beach, long gone were thoughts of the harsh winter and decline in first-quarter GDP. As we had expected it would, the U.S. economy rebounded in the second quarter, proving the naysayers, pessimists, and doom and gloom types completely wrong. In addition, U.S. equity markets continued to move higher throughout the summer, with many benchmarks hitting record highs. Twenty-fourteen was certainly no year to “sell in May and go away.”
Fifty years ago, the world was a different place. In 1964, Dr. Martin Luther King, Jr. was awarded the Nobel Peace Prize, China detonated its first atomic bomb, Russian Premier Nikita Khruschev was deposed, and Nelson Mandela was sentenced to life in prison. In the U.S., Lyndon Johnson received the democratic nomination for President, the Warren Commission’s report on the assassination of President Kennedy was released, New York hosted the World’s Fair, Congress passed the Gulf of Tonkin Resolution, the Beatles appeared on The Ed Sullivan Show, and the S&P 500 hit a peak of 86.28 in November.