Category: Economics
Economic: U.S. Industrial Production
Throughout the years investors have keyed on levels of industrial production in an attempt to identify directional changes in the stock market. We have all watched significant changes in the market attempted to be explained by a corresponding move in industrial production. “The market moved up because…”, or “The Market moved down because…” resonates, when markets move in one direction or the other, on the same day that industrial production numbers have been released. This explanation may be useful on a daily basis, or may be interesting to contemplate, but for longer period analysis it is less certain.
Service Change: Economic Factor Industrial Production Added to Stock Analysis
Today we are starting to show the influence of the U.S. Industrial Production on U.S. stocks within the database. Each individual stock’s data sheet will now have a notation titled Industrial Production. Figure 1 provides a cutout of the table that is available through the stock search menu option. The Industrial Production index is an economic indicator that measures real output for all facilities located in the U.S. manufacturing, mining, electric and gas utilities. It also includes newspapers, periodical and book publishing. The index is calculated monthly with a base year of 2002.
Economic: U.S. – Consumer Credit
Consumer credit is as old as human history but, Adam Smith (1723-1790) mostly dismissed the idea because he never thought it would be popular. Benjamin Franklin observed in Poor Richard’s Almanack that staying out of debt was desirable but, not always practiced, “the People heard it and approved the Doctrine, and immediately practiced the contrary”. Most early economists never believed consumer credit would have a major impact on global economies.
Update Economic USA Consumer Credit
Consumer credit continues to show renewed expansion without undue stress in servicing debt. Household debt remains low at 66% of household economic output compared to 87% of 2009.
Update Economic USA Employment
Employment continues to do well in the U.S. with the addition of 235,000 in nonfarm payrolls. This is better than the previous month in all categories except Midsized businesses. Increases in the small business category is especially important because this is the category where most new jobs are created. Most jobs in larger enterprises are replacement positions, but even in this category the additions were 62,000 greater than previous. Inflation in wages may start to appear in greater earnest in the next 6 months, but for now it is subdued at 2.4% annually. The unemployment rate remains extremely low at 4.1% with 5.27 million new hirings.