It's The Economy Stupid: A Bunch of Stuff

 

Economic Event	Period	Economic Survey	Actual Reported	Original Prior	Revised Prior
Advance Retail Sales	NOV	0.5%	0.3%	-0.3%
Retail Sales Less Autos	NOV	0.0%	0.0%	0.0%
Retail Sales Ex Auto & Gas	NOV	0.4%	0.7%	-0.3%	-0.1%
Retail Sales "Control Group"	NOV	0.3%	0.5%	-0.1%	0.0%
Producer Price Index MoM	NOV	-0.5%	-0.8%	-0.2%
PPI Ex Food & Energy MoM	NOV	0.1%	0.1%	-0.2%
Producer Price Index YoY	NOV	1.8%	1.5%	2.3%
PPI Ex Food & Energy YoY	NOV	2.2%	2.2%	2.1%
Initial Jobless Claims	NOV 16	369K	343K	370K	372K
Continuing Claims	NOV 17	3210K	3198K	3205K	3221K

 

 

Retail Sales are better, and that’s good.  Producer Prices were mixed, not rising greatly, and that’s a good thing.  Jobless Claims are down, and that could be a good thing, if the people are finding jobs and not falling out of the workforce.

 

After sleeping on it for a night, I think the Fed’s message was basically:  “We seem to be at a new normal, where long term structural unemployment has gone from 4.5% (the old normal) to 6.5% (the new normal), and we are going to keep rates low until we can move the lousy unemployment numbers down to the new normal and we are going to forget about the old normal for now.” 

 

The only problem is that as the Fed layers on more and more stimulus, each layer seems to produce less and less results.  So we are going to inflate the Fed balance sheet by another Trillion Dollars, and we are very likely to get less bang for our buck.  And my confidence in the Fed being able to unravel all of these Trillions of Dollars in security trades without serious negative side effects is near zero.  They may be good at what they do, but they are not that good.

 

 

John Broussard

Assistant State Treasurer

Chief Investment Officer

State of Louisiana

Department of the Treasury

Ph:  225-342-0013

Fx:  225-342-9721

Email:  jbroussard@treasusry.state.la.us

Street Address:

445 North Blvd, 7^th Floor

Baton Rouge, LA 70802

Mailing Address:

P.O. Box 44154 Capitol Station

Baton Rouge, LA 70804-4154

Physical Location:

One City Plaza, 7th Floor

Corner of North Blvd & 4th Street

Exit 1B I-110 Convention Street,

Turn Left to get to North Blvd,

Turn Right on North Blvd