It Will Be Ugly

THE BE YOUR OWN ECONOMIST ® BLOG

Here are the key paragraphs from today’s GDP release for the third quarter
(http://www.bea.gov/newsreleases/national/gdp/2008/txt/gdp308a.txt):

“Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- decreased at an annual rate of 0.3 percent in the third quarter of 2008, (that is, from the second quarter to the third quarter), according to advance estimates released by theBureau of Economic Analysis. In the second quarter, real GDP increased 2.8 percent……

“The decrease in real GDP in the third quarter primarily reflected negative contributions from personal consumption expenditures (PCE), residential fixed investment, and equipment and software that were largely offset by positive contributions from federal government spending, exports, private inventory investment, nonresidential structures, and state and local government spending. Imports, which are a subtraction in the calculation of GDP, decreased.

“Most of the major components contributed to the downturn in real GDP growth in the third quarter. The largest contributors were a sharp downturn in PCE for nondurable goods, a smaller decrease in imports, a larger decrease in PCE for durable goods, and a deceleration in exports. Notable offsets were an upturn in inventory investment and an acceleration in federal government spending.”

If you look at the tables accompanying the report you’ll see that personal consumption expenditures fell by 3.1% due to a 16.1% decline in durable-goods purchases and a 6.4% drop in nondurable-goods expenditures. Spending on services continued to grow.

This is cause for alarm because this report covers July, August and September, i.e. before the financial crisis hit. There’s every indication that consumer outlays have fallen into the deep freeze with the crisis’s advent. How low will these numbers plunge for the October, November and December quarter? Most likely response: It will be ugly.

© 2008 Michael B. Lehmann

Pushing On A String

THE BE YOUR OWN ECONOMIST ® BLOG

Today the Federal Reserve reduced the federal funds rate – the rate at which banks lend reserves to one another – by half-a-percent to one percent.

The following paragraph is an excerpt from the Fed’s statement (http://www.federalreserve.gov/newsevents/press/monetary/20081029a.htm):

“The pace of economic activity appears to have slowed markedly, owing importantly to a decline in consumer expenditures. Business equipment spending and industrial production have weakened in recent months, and slowing economic activity in many foreign economies is damping the prospects for U.S. exports. Moreover, the intensification of financial market turmoil is likely to exert additional restraint on spending, partly by further reducing the ability of households and businesses to obtain credit. “

In other words, we’re in for a bad recession.

Will the Fed’s rate cut pull us out of the ditch?

Unfortunately today is not 2001. Back then, as the dot-com recession unfolded, the Fed reduced interest rates in order to stimulate borrowing and spending, and thereby revive the economy. Real estate responded by generating the housing bubble whose collapse is responsible for the current debacle. It does not seem likely that reducing rates today will instigate another building boom. Home prices keep falling as the market attempts to absorb the leftovers from the earlier glut. Until that process winds down, lower rates can not help much.

This problem is replicated throughout the economy. Motor-vehicle sales are heading south because households wish to repay debt and preserve liquidity. For many this is not the right time to buy a car no matter how low rates have fallen. Businesses seem to be cutting back for the same reason. Few see today as the right time to invest in additional facilities and employees. Quite to the contrary, employment is falling as layoffs rise.

Economists once said that interest rates are like a string – far better at holding the economy back than pushing it forward. That proved to be incorrect in 2001. It may be correct today.

© 2008 Michael B. Lehmann

Blue Christmas

THE BE YOUR OWN ECONOMIST ® BLOG

Today the Conference Board released its consumer-confidence survey
(http://www.conference-board.org/economics/ConsumerConfidence.cfm ).

The following paragraphs are from the accompanying press release:

“The Conference Board Consumer Confidence Index™, which had improved moderately in September, fell to an all-time low in October. The Index now stands at 38.0 (1985=100), down from 61.4 in September….

"Says Lynn Franco, Director of The Conference Board Consumer Research Center: "The impact of the financial crisis over the last several weeks has clearly taken a toll on consumers' confidence. The decline in the Index (-23.4 points) is the third largest in the history of the series, and the lowest reading on record. In assessing current conditions, consumers rated the labor market and business conditions much less favorably, suggesting that the fourth quarter is off to a weaker start than the third quarter. Looking ahead, consumers are extremely pessimistic, and a significantly larger proportion than last month foresees business and labor market conditions worsening. Their earnings outlook, as well as inflation outlook, is also more pessimistic, and this news does not bode well for retailers who are already bracing for what is shaping up to be a very challenging holiday season."

There are a number of remarkable features of this release, including the single-month drop of over 20 points. Perhaps the most dramatic of all is the perspective gained when you update the chart below with the latest reading of 38.0

Consumer Confidence

(Click on chart to enlarge)

Recessions shaded

You can see that the index has never before fallen below 40, and you can see that recession has accompanied all past readings of 60 or lower. Observers quibble over whether or not month-to-month changes in consumer confidence forecast household expenditures. But there seems no arguing about the historical significance of this indicator. The correlation between its downward trends and recession seems quite clear.

Nonetheless we must wonder…… What is the significance of 38.0, the lowest reading ever? How much lower will the index fall? What is the significance for consumer purchases of everything from travel to autos? How severe will be the unfolding recession?

One thing for sure. It looks like a Blue Christmas for retailers and many more as well.

(The chart was taken from http://www.beyourowneconomist.com. [Click on Seminars and then Charts.] Go there for additional charts on the economy and a list of economic indicators.)

© 2008 Michael B. Lehmann

Ray of Hope?

THE BE YOUR OWN ECONOMIST ® BLOG

Today the Census Bureau said (http://www.census.gov/const/newressales.pdf):

“Sales of new one-family houses in September 2008 were at a seasonally adjusted annual rate of 464,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 2.7 percent (±12.1%)* above the revised August rate of 452,000, but is 33.1 percent (±8.9%) below the September 2007 estimate of 694,000.

“The median sales price of new houses sold in September 2008 was $218,400; the average sales price was $275,500. The seasonally adjusted estimate of new houses for sale at the end of September was 394,000. This represents a supply of 10.4 months at the current sales rate.”

Bottom Line: Prices continued to fall and inventories remained near record highs.

This reinforced the impression created by the National Association of Realtors” October 24 report (http://www.realtor.org/press_room/news_releases/2008/ehs_rise_on_affordability?LID=RONav0021 ):

"Existing-home sales increased last month as buyers responded to improved housing affordability conditions, according to the National Association of Realtors®.

"Existing-home sales – including single-family, townhomes, condominiums and co-ops – rose 5.5 percent to a seasonally adjusted annual rate¹ of 5.18 million units in September from a level of 4.91 million in August, and are 1.4 percent higher than the 5.11 million-unit pace in September 2007.

"The national median existing-home price3 for all housing types was $191,600 in September, down 9.0 percent from a year ago when the median was $210,500. "

Bottom Line: Prices continued to fall and inventories remained near record highs.

Conclusion: The pace of sales for new and existing homes may be bottoming out, but price-discounting leads the way and inventories remain high. This is bad news for homeowners whose equity continues to melt away as prices decline. It’s hard to see how economic conditions can stabilize without home-price stability. As long as household wealth continues to decline, households will limit their spending.

© 2008 Michael B. Lehmann

The Maestro Testifies

THE BE YOUR OWN ECONOMIST ® BLOG

Alan Greenspan testified today before the House Committee on Oversight and Government Reform. Here are some excerpts from his prepared remarks (http://oversight.house.gov/documents/20081023100438.pdf).

“In 2005, I raised concerns that the protracted period of underpricing of risk, if history was any guide, would have dire consequences. This crisis, however, has turned out to be much broader than anything I could have imagined. It has morphed from one gripped by liquidity restraints to one in which fears of insolvency are now paramount………

“What went wrong with global economic policies that had worked so effectively for nearly four decades? The breakdown has been most apparent in the securitization of home mortgages. The evidence strongly suggests that without the excess demand from securitizers, subprime mortgage originations (undeniably the original source of crisis) would have been far smaller and defaults accordingly far fewer………….

“It was the failure to properly price such risky assets that precipitated the crisis. In recent decades, a vast risk management and pricing system has evolved, combining the best insights of mathematicians and finance experts supported by major advances in computer and communications technology……….

“When in August 2007 markets eventually trashed the credit agencies’ rosy ratings, a blanket of uncertainty descended on the investment community. Doubt was indiscriminately cast on the pricing of securities that had any taint of subprime backing. As much as I would prefer it otherwise, in this financial environment I see no choice but to require that all securitizers retain a meaningful part of the securities they issue. This will offset in part market deficiencies stemming from the failures of counterparty surveillance.

“There are additional regulatory changes that this breakdown of the central pillar of competitive markets requires in order to return to stability, particularly in the areas of fraud, settlement, and securitization. It is important to remember, however, that whatever regulatory changes are made, they will pale in comparison to the change already evident in today’s markets. Those markets for an indefinite future will be far more restrained than would any currently contemplated new regulatory regime……….

“This crisis will pass, and America will reemerge with a far sounder financial system.”

These quotations summarize The Maestro’s views on the causes of the crisis and its consequences for mortgage markets as well as his belief that “…America will reemerge with a far sounder financial system.”

Four questions:

1. What about The Maestro’s role in pumping up the real-estate bubble? The Fed drove interest rates into the basement in 2001 and held them there despite a robust housing market. This was the root cause of the 100-year flood of real-estate speculation in 2002 through 2006. No root cause, no bubble.

2. What about The Maestro’s rejection of pleas by federal regulators that the Fed support enhanced regulation, supervision and oversight of mortgage markets in the face of the unfolding sub-prime abuses? Adequate regulation, supervision and oversight of mortgage markets could have restrained the bubble.

3. Didn’t The Maestro say that goods-and-services price inflation is the Fed’s concern, but asset inflation is not? If the Fed had registered sufficient concern, perhaps the real-estate bubble could have been restrained.

4. Didn’t The Maestro say that real-estate bubble’s can’t occur because people live in their homes – unlike stocks - and home prices always rise? So much for those points of view.

There may be additional issues, but these are a good start.

© 2008 Michael B. Lehmann

Out of Action

THE BE YOUR OWN ECONOMIST ® BLOG

The blogger will attend his 50th high school reunion this weekend and be out of action for a week.

© 2008 Michael B. Lehmann

Have We Learned Our Lesson?

THE BE YOUR OWN ECONOMIST ® BLOG

The following reworks yesterday’s posting:

The federal government’s new plan to invest in the nation’s banks, guarantee their loans and insure their deposits is welcome news. It borrows from European initiatives launched over the weekend and improves upon our own bailout package.

But many people will ask, “What took us so long? We led the world into crisis, why couldn’t we lead the world out of crisis?”

Most economists said Federal Reserve Chairman Ben Bernanke’s research on the Great Depression of the 1930s well-prepared him for the job. They believed that Mr. Bernanke’s scholarship would help him avoid the kind of crisis that recently befell us.

Mr. Bernanke endorsed the conventional wisdom that the Fed’s high-interest-rate policies in the 1930s turned a run-of-the-mill recession into the Great Depression. Instead, the argument goes, the Fed should have reduced interest rates to stimulate borrowing and spending.

The view that misguided government policy caused the Great Depression soon became part and parcel of the notion that government can’t do anything right. Few stopped to ask: “Just because a policy failed, why does that condemn all government action?”

Recently, under Chairman Bernanke, laissez faire principles motivated the Fed to maintain a hands-off, minimalist approach. The Fed let low interest rates and lax lending standards inflate the real-estate bubble. When the bubble began to deflate and mortgage-backed securities instigated the global financial crisis, the Fed and the Treasury underplayed the problem. Instead of taking a systematic and systemic approach they proceeded in an ad hoc and piecemeal fashion. Eventually credit markets became so impaired and the emergency so pronounced, the Fed and the Treasury felt compelled to reverse course and implement a comprehensive government rescue of the financial system.

What an irony. Economists endorsed Mr. Bernanke because they believed he had learned from mistakes the Fed made during the Great Depression. But those lessons were clearly insufficient to avert the recent crisis. The real lesson is that blind adherence to free-market principles, not government action, was the chief culprit this time. On occasion a wise, well-informed and intelligent pragmatism is what’s really needed.

© 2008 Michael B. Lehmann

Words and Deeds

THE BE YOUR OWN ECONOMIST ® BLOG

When President Bush appointed Ben Bernanke Chairman of the Federal Reserve’s Board of Governors, most economists said that Mr. Bernanke’s scholarly research on the Great Depression well-prepared him for the job.

Mr. Bernanke endorsed economists’ conventional wisdom that the Fed’s inappropriate actions at the Depression’s outset exacerbated the downturn. The Fed maintained a high-interest-rate policy to defend America gold reserves instead of reducing interest rates aggressively to stimulate borrowing and spending. Because of those high interest rates, so the conventional wisdom goes, a run-of-the-mill recession became the Great Depression.

That version of the Depression’s cause became a key ingredient of free-market ideology: Misguided government policy caused the Great Depression. This viewpoint soon became part and parcel of the notion that “Government Can’t.” Or, to paraphrase Ronald Reagan, “Government is the problem, not the solution.” The corollary: Let markets alone; don’t impede them with excess regulation, supervision and control.

President Bush appointed Ben Bernanke to lead the Fed because Mr. Bernanke espoused those free-market principles. These principles motivated Mr. Bernanke to maintain the hands-off stance of his predecessor, Alan Greenspan, an appointee of President Reagan. Mr. Greenspan and Mr. Bernanke took a minimalist approach: They let low interest rates and lax lending standards inflate the real-estate bubble.

As the bubble began to deflate and mortgage-backed securities became the toxic waste that led to the global financial crisis, Mr. Bernanke maintained his minimalist approach. Both he and Treasury Secretary Henry Paulson underplayed the crisis, invoking the doctrine of “moral hazard” to avoid bailing out foolish lenders. Instead of taking a systematic and systemic approach – such as the rescue package originating in Europe on the weekend of October 11 and 12 – Mr. Bernanke and Mr. Paulson proceeded in an ad hoc and haphazard fashion. They organized a bucket brigade instead of clearing a fire line. It was not until the European nations showed the way that they abandoned ideology and fully embraced pragmatic solutions.

What an irony. Economists endorsed Mr. Bernanke because they thought he had learned from mistakes the Fed had made during the Great Depression. Unfortunately, instead of embracing the benefits of an activist Fed that “can and should”, Mr. Bernanke came away with a minimalist free-market ideology that said the Fed “can’t and shouldn’t.” Instead of leading the charge for a robust and systematic response to the crisis, the Fed consistently remained one step behind.

© 2008 Michael B. Lehmann

True Value

THE BE YOUR OWN ECONOMIST ® BLOG

What are our assets truly worth?

The recent real-estate and stock-market debacles tell us that housing and equities were grossly overvalued.

There were two overvaluation bursts: The late 1990s and the recent real-estate run-up.

The late 1990s boom gave us an exaggerated notion of stock-market values. We came to believe that the dot-com boom’s lofty heights were true value, while the dot-com bust’s comedown was somehow artificial.

After the recent real-estate run-up, we embraced the notion that the recent boom was real and the subsequent bust was merely a bad dream. We feel that home values will pop back up to their earlier levels as soon as the nightmare is over.

The same is true for the latest stock-market reversal. Somehow the boom was true and the bust is false. We deserved those out-size values which, after all, were no higher than the levels we enjoyed during the late 1990s dot-com boom.

So when will the markets snap out of it and return us to true value?

Unfortunately they’re doing that right now, but not in the way we want. Capitalism may be a tale of wealth-creation, but it encompasses episodes of wealth-destruction. And we’re experiencing one today.

Think of the economy as a gigantic balance sheet, with real estate and stocks on the left side and debt on the right side. We pumped up the left side’s real estate and stocks by taking on enormous amounts of right-side debt. Now, as real-estate and stock-market holdings deflate, we are desperately attempting to repay our debts. The entire balance sheet is shrinking.

How far will it shrink? Back to true value.

© 2008 Michael B. Lehmann

Dow Down Another 508

THE BE YOUR OWN ECONOMIST ® BLOG

Fed Chairman Ben Bernanke’s speech (http://www.federalreserve.gov/newsevents/speech/bernanke20081007a.htm)
at today’s meeting of the National Association for Business Economics didn’t help the stock market. The Dow fell 508 points, compounding yesterday’s 370-point drop.

The Chairman said:

“All told, economic activity is likely to be subdued during the remainder of this year and into next year. The heightened financial turmoil that we have experienced of late may well lengthen the period of weak economic performance and further increase the risks to growth.”

Translation: We’re in a recession that may last until the end of next year.

Yesterday’s posting said the recession would erode earnings and reduce the P/E, and that these developments would further depress the stock market.

The following chart shows profit margins’ remarkable spring-back after the 2001 dot-com bust. You can see margins’ all-time peak in 2006 and the subsequent slippage in 2006 and 2007. It’s a safe bet that the current recession will depress margins through 2008 and 2009. Margins may even fall below their 2001 trough and recede to depths plumbed in earlier recessions.

Profit Margins

(Click on chart to enlarge)


Recessions shaded

In the next chart you can see profit margins’ powerful impact on after-tax corporate profits. Earnings more than doubled following the 2001 recession. But they were already beginning to turn in 2006 and 2007. As recession erodes profit margins, earnings will head south. How far will they fall? Nobody knows.

After-tax Earnings

(Click on chart to enlarge)


Recessions shaded

As recession spreads a pall of gloom over the economy and earnings slump, the price/earnings (P/E) ratio will also suffer.

S&P, P/E Ratio & Earnings Per Share

(Click on chart to enlarge)


Recessions shaded

Earnings’ strong performance since the dot.com bust kept the P/E (price/earnings) ratio above its historical pre-1990s average of about 15 to 1. That is, robust earnings inspired investors to maintain a high price for stocks relative to earnings. But falling earnings will now erode confidence, reducing the P/E and further depressing stocks.

In sum: Recession will depress both earnings and the P/E. That double whammy will drive stocks into the basement.

(The charts are taken from http://www.beyourowneconomist.com. [Click on Seminars and then Charts.] Go there for additional charts on the economy and a list of economic indicators.)

© 2008 Michael B. Lehmann

Dow Down 370

THE BE YOUR OWN ECONOMIST ® BLOG

Everyone’s talking about the world-wide financial crisis, and that may have been the main driver behind today’s 370-point-loss on the Dow. But don’t forget the effect of the recession that’s unfolding.

It will do two things: Erode earnings and reduce the P/E. Both of these developments will further depress the stock market.

Corporate earnings have done very well since the 2000 – 2002 dot.com bust. Now, with the recession, they’re headed for the basement. That alone would be bad for the stock market.

In addition, earnings’ strong performance since the dot.com bust kept the P/E (price/earnings) ratio above its historical average. Strong earnings inspired investors to maintain a high price for stocks relative to earnings. But falling earnings will erode confidence, further depressing stocks.

Tomorrow’s posting will mobilize a set of charts to illustrate these points.

© 2008 Michael B. Lehmann

Minus 159,000

THE BE YOUR OWN ECONOMIST ® BLOG

Nonfarm employment fell by 159,000 jobs in September according to the latest Bureau of Labor Statistics report (http://stats.bls.gov/news.release/empsit.nr0.htm).

Update the chart below with that data and you can see we are in recession. It’s just not official yet.

Job Growth

(Click on chart to enlarge)

Recessions shaded

Will the bailout stop the economy’s slide? It can’t. It’s too late. There’s too much bad news and the economy is deteriorating at too rapid a rate. The choice before us now is: Bad recession or horrible recession, not whether or not there will be a recession.

If the bailout works, we’ll have a bad recession that lasts quite a while. If the bailout doesn’t work, we’ll have a horrible recession that lasts even longer.

Stay tuned.

(The charts are taken from http://www.beyourowneconomist.com. [Click on Seminars and then Charts.] Go there for additional charts on the economy and a list of economic indicators.)

© 2008 Michael B. Lehmann

Recent Data

THE BE YOUR OWN ECONOMIST ® BLOG

Even if the House backs up the Senate and passes the bailout bill, that won’t save us from recession.

Yesterday the Institute for Supply Management released its Purchasing Managers’ Index for September: 43.5 (above 50 = manufacturing expanding, below 50 = manufacturing contracting). The index has been hanging out for months at just under 50. The recent figure indicates a sharp contraction in manufacturing activity.

Meanwhile the Commerce Department just disclosed that the auto industry sold 12.5 million vehicles in September. Last year’s September figure was 16.1 million. Enough said.

Finally, the Census Bureau announced today $68.6 billion worth of new orders for nondefense capital goods in September. It’s been flat, averaging in the mid 70s, for most of the year. Another sharp drop.

The bailout can’t reverse these trends. We may have been saved from a severe recession, but we haven’t been saved from recession.

© 2008 Michael B. Lehmann

October Publication Schedule & Web Sources

THE BE YOUR OWN ECONOMIST ® BLOG

You can use the WEB SOURCES listing (below) to find the data on your own and read the accompanying press release. The addresses take you to the source’s home page and the steps tell you how to navigate the site. That way (rather than provide a direct link to the data) you can become familiar with these sites and find additional information on your own.

PUBLICATION SCHEDULE

October 2008

Source (* below)…………Series Description…………Day & Date

Quarterly Data

BEA…………………………GDP……………………...……Thu, 30th

Monthly Data

ISM………………….Purchasing managers’ index……….Wed, 1st
Fed…………………………..Consumer credit……..……….Tue, 7th
BLS………………………….Employment………………… Fri, 3rd
Census……………………...Balance of trade………………Fri, 10th
Census……………………...Retail trade…………………….Wed, 15th
Census……………………...Inventories……………………..Wed, 15th
BLS………………………….Consumer prices……………...Thu, 16th
Fed…………………………..Industrial production………….Thu, 16th
Fed………………………….Capacity utilization…………….Thu, 16th
Census……………………..Housing starts………………….Fri, 17th
BLS………………………….Producer prices……………….Wed, 15th
Conf Bd…………………….Leading Indicators…………….Mon, 20th
Conf Bd…………………….Consumer confidence…………Tue, 28th
Census…………………….Capital goods……………….…..Wed, 29th
Census……………………..New-home sales……………….Mon, 27th
NAR…………………………Existing-home sales…….…….Fri, 24th

* BEA = Bureau of Economic Analysis of the U.S. Department of Commerce
* BLS = Bureau of Labor Statistics of the U.S. Department of Labor
* Census = U.S. Bureau of the Census
* Conf Bd = Conference Board
* Fed = Federal Reserve System
* ISM = Institute for Supply Management
* NAR = National Association of Realtors

WEB SOURCES

Index of Leading Economic Indicators: http://www.conference-board.org/..........
Step 1: Click on "Economics" in the left-hand menu bar…………………………………….
Step 2: Click on "Economic Indicators" under "Economics" in the left-hand menu bar………………………………………………………………………………………………………………..
Step 3: Click on link under "U.S. Leading Indicators"………………………………………

Gross Domestic Product: http://www.bea.gov/....................................................
Step 1: Click on "Gross Domestic Product" under "National"………………………….
Step 2: Click on "National Income and Product Accounts Tables" under "Gross Domestic Product (GDP)"……………………………………………………………………………
Step 3: Click on "list of all NIPA Tables"………………………………………………………….
Step 4: Click on "Table 1.1.6. Real Gross Domestic Product..." and "Table 1.1.1. Percent Change..."……………………………………………………………………………………….
Step 5: Scroll down to line 1 in both tables and go to the last column on the right

Industrial Production & Capacity Utilization: http://www.federalreserve.gov/
Step 1: Click on "All Statistical Releases" under "Recent Statistical Releases" and then click on "Industrial Production and Capacity Utilization" under "Principal Economic Indicators" in the upper left…………………………………………………………
Step 2: Find the latest monthly data in the table next to "Total index" and "Total industry"……………………………………………………………………………………………………..

Institute For Supply Management Index: http://www.ism.ws/ ……………………….
Step 1: Click on "ISM Report on Business" in left-hand menu bar……………………
Step 2: Click on “Latest Manufacturing ROB” and find the latest PMI…………….

Producer Prices: http://stats.bls.gov/.....................................................................
Step 1: Click on “Producer Price Indexes” under “Inflation & Consumer Spending” in left-hand menu bar………………………………………………………………….
Step 2: Note "Finished goods" under "Latest Numbers" in upper right and multiply by 12 to put the data on an annual basis……………………………………….

Business Capital Expenditures (Nondefense Capital Goods): http://www.census.gov/ ……………………………
1: Click on "Economic Indicators" in the lower right…………………………………
Step 2: Click on "PDF" on the left under "Advance Report on Durable Goods Manufacturers' Shipments and Orders"…………………………………………………………..
Step 3: Scroll down to Table 1 and find new orders for nondefense capital goods near the bottom……………………………………………………………………………………………..

Inventories, Sales & Inventory/Sales Ratio: http://www.census.gov/
Step 1: Click on "Economic Indicators" in the lower right…………………………………
Step 2: Click on "HTML" on the left under "Manufacturing and Trade Inventories and Sales"..........................
Step 3: Scroll down to Table 1 and subtract previous month's inventories from latest month's and multiply by 12 to obtain inventory change, and then obtain the most recent inventory/sales ratio……………………………………………………………………

Consumer Price Index: http://stats.bls.gov/...........................................................
Step 1: Click on “Consumer Price Index” under “Inflation & Consumer Spending” in left-hand menu bar………………………………………………………………………………….
Step 2: Note "CPI-U..." at the top under "Latest Numbers" in upper right and multiply "SA" by 12 to put the data on an annual basis…………………………………..

Employment Data (Total Non-farm Payroll Employment) (Unemployment Rate) (Manufacturing Workweek): http://stats.bls.gov/ ………………………………………..
Step 1: Click on “National Employment” under “Employment & Unemployment” in right-hand menu bar………………………………………………………………………………
Step 2: Click on (HTML) following “Employment Situation Summary” under "Economic News Releases"……………………………………………………………………….
Step 3: Click on “Employment Situation Summary” under “Table of Contents”
Step 4: Scroll down to Table A and find the unemployment rate for all workers in the latest month, the change in nonfarm employment in the last column and manufacturing hours of work for the latest month…………………………………………..

Personal Income: http://www.bea.gov/.....................................................................
Step 1: Click on "Gross Domestic Product" under "National"……………………………..
Step 2: Click on "National Income and Product Accounts Tables" under "Gross Domestic Product (GDP)"…………………………………………………………………………….
Step 3: Click on "list of all NIPA Tables"……………………………………………………….
Step 4: Click on "Table 2.6 Personal Income..."…………………………………………………
Step 5: Scroll down to line 1…………………………………………………………………………..

Consumer Confidence: http://www.conference-board.org/....................................
Step 1: Click on the "Economics" in the left-hand menu bar……………………………….
Step 2: Click on "Economic Indicators" under "Economics" in the left-hand menu bar………………………………………………………………………………………………………………..
Step 3: Click on link under "Consumer Confidence Index"…………………………………

Consumer Credit: http://www.federalreserve.gov/...................................................
Step 1: Click on "All Statistical Releases" under "Recent Statistical Releases" and then click on "Consumer credit -- G19" under "Household Finance" in the upper right…………………………………………………………………………………………………………..
Step 2: Click on "Current Release"…………………………………………………………………
Step 3: Go to "Amount ... billions of dollars" and subtract previous month from current month & multiply by 12 to obtain seasonally adjusted dollar amount at annual rate………………………………………………………………………………………………..

Housing Starts: http://www.census.gov/..................................................................
Step 1: Click on "Economic Indicators" in the lower right………………………………….
Step 2: Click on "PDF" on the left under "Current Press Release" under "Housing Starts/Building Permits"………………………………………………………………………………..
Step 3: Scroll down to "Housing Starts"…………………………………………………………..

Home Sales (Existing-Home Sales): http://www.realtor.org/.................................
Step 1: Click on "Research" in the left-hand menu bar……………………………………….
Step 2: Find "Existing-Home Sales" under "Housing Indicators"……………………..

Home Sales (New-Home Sales): http://www.census.gov/.......................................
Step 1: Click on "Economic Indicators" in the lower right………………………………..
Step 2: Click on "PDF" on the left under "Current Press Release" under "New Home Sales"………………………………………………………………………………………………….

Retail Sales: http://www.census.gov/.......................................................................
Step 1: Click on "Economic Indicators" in the lower right…………………………………..
Step 2: Scroll down to "Advance Monthly Sales for Retail and Food Services" and click on "HTML" on the left under "Current Press Release"………………………………

© 2008 Michael B. Lehmann