Economic Indicators to WatchWhat Are the Odds of a 2012 Recession?                                              New York, ...
Economy Isn’t Advancing Fast Enough to Engender Job Creation                                             Nonfarm Payrolls ...
Economy Operating Well Below its Potential                                     Real GDP (Blns) vs. Real Potential GDP (Bln...
Employment To Be a Slow Train Coming                                     Nonfarm Payroll Creation From Onset of Recession ...
Employment To Be a Slow Train Coming -- II                                          peak-to-trough                        ...
No Hiring by the Private Sector                                                                                       Unem...
No Words to Express this Stat                                 Average Duration of Unemployment in Weeks   45.0   40.0   35...
Little “Improvement” in Unemployment Benefit Claims                         Continuing, Emergency, and Extended Jobless Be...
Little Signs of Recovery…Richard Yamarone, ryamarone@bloomberg.net, TEL: 212-617-8737
Trusted Street Indicator Signaled ‘Double-Dip’                                         ECRI Weekly Leading Index          ...
Economy Set for An ‘About-Face’                                       Leading Economic Indicators (Y/Y%)                  ...
If GDP Dips to 2.0% -- It’s Recession Time                                                 Real GDP (Y/Y %) 14 12 10   8  ...
Robust Fed Index Points to Sub-Par Performance                                          Chicago Fed National Activity Inde...
Economic Deceleration Occurred During Early June                              Real GDP (Y/Y%) vs. Railcar Loads of Waste/S...
Manufacturing Gains Not Generating Jobs                               Industrial Production Index, Manufacturing Jobs (000...
It’s 1941 For Manufacturing                                               U.S. Manufacturing Employment                   ...
Won’t Get Any Jobs from Housing                                    Residential Construction Spending ($ mls)              ...
This is what the Fed is Trying to Revive?                              Residential Investment as a Percent of GDP (%) 8 7 ...
Housing Depression Continues                                           Mortgage Bankers Associations                      ...
Home Prices Falling Again                               S&P-Case-Shiller Home Price Index                    AZ-Phoenix   ...
Commercial Construction Slump                                Total U.S. Commercial Construction Spending ($ mlns)      $10...
Retailers Headed Out of the Malls                                               Regional & Strip Mall Vacancies     12.0% ...
State & Local Governments May be a Ticking Time Bomb                              State & Local Government Employment (in ...
Earnings/Analyst Conference Calls
Bloomberg Orange Book                                  Summary of Commentary on ____________________                      ...
What is Being Said… “And so were still seeing that midnight shopping in our stores when that EBT card, its like a debit ca...
It Pays to Read those 200 Transcripts…                       Fed Ex Total US Package Shipments (Y/Y%) vs. Real GDP (Y/Y%)G...
Not Enough Fuel in the Tank                                         Real Disposable Personal Incomes (Y/Y%)     8.00     6...
Not Enough Fuel in the Tank -- II                                        Average Hourly Earnings (Y/Y%) by Industry       ...
What Happens When the Stimulus Ends?                                            Government Stimulus Driving IncomesIncomes...
Recession Comparison of Real Incomes                                 Real Incomes Ex-Transfers From Onset of Recession   1...
Collapse In Credit Card Debt, Still Uncertain                            Monthly Change in Consumer Revolving Debt ($ bill...
Persons Receiving Food Stamps at All-Time High                                    Supplemental Nutrition Assistance Progra...
There is No Holy Grail of Economic IndicatorsRichard Yamarone, ryamarone@bloomberg.net, TEL: 212-617-8737
‘Fab Five’ – Dining Out                                          Spending: Dining Out(Y/Y%)  8  6  4  2  0  -2  -4  -6    ...
‘Fab Five” – Jewelry & Watches                                    Spending: Jewelry & Watches Y/Y% 16 12  8  4  0 -4 -8-12...
‘Fab Five’ – Cosmetics & Perfumes                                  Spending: Cosmetics & Perfumes (Y/Y%)  9  6  3  0  -3  ...
Richard Yamarone, ryamarone@bloomberg.net, TEL: 212-617-8737
‘Fab Five’ – Women’s Dresses                                 Spending: Womens & Girls Clothing (Y/Y%) 12  9  6  3  0  -3  ...
‘Fab Five’ – Casino Gambling                                     Spending: Casino Gambling Y/Y%   24   20   16   12    8  ...
Trade Picture isn’t Looking Too Encouraging…Richard Yamarone, ryamarone@bloomberg.net, TEL: 212-617-8737
Trade Helped During the Housing Bust,                                 But No Longer Convincingly Contributor              ...
Money Beginning to Enter Goods Market to ‘Chase too Few Goods’                                        C& I Loans Large Com...
Inflation Not A Primary Concern                               Personal Consumption Expenditure Deflator (Y/Y%)  6  5  4  3...
Richard Yamarone, ryamarone@bloomberg.net, TEL: 212-617-8737
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Richard Yamarone Economic Indicators to Watch

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Presentation referenced by Richard Yamarone of the Bloomberg Economic BRIEF, at the 2012 Texas Financial Market Roundtable sponsored by Professor Lewis Spellman at the McCombs School of Business, The University of Texas at Austin. Mr. Yamarone is the author of "The Trader's Guide to Key Economic Indicators."

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Richard Yamarone Economic Indicators to Watch

  1. 1. Economic Indicators to WatchWhat Are the Odds of a 2012 Recession? New York, NY Monday, June 4, 2012 Richard Yamarone Bloomberg Economic BRIEF Author of “The Trader’s Guide to Key Economic Indicators”Richard Yamarone, ryamarone@bloomberg.net, TEL: 212-617-8737 Twitter: @Yamarone
  2. 2. Economy Isn’t Advancing Fast Enough to Engender Job Creation Nonfarm Payrolls vs. Real GDP Payrolls (000) GDP YOY% 1200 6 5 800 4 400 3 2 0 1 -400 0 -800 -1 -2 -1200 -3 -1600 -4 NFP (lhs) GDP (rhs) -5 -2000 -6 -2400 -7 85 87 89 91 93 95 97 99 01 03 05 07 09 11 Source: BEA, BLS, Bloomberg Richard Yamarone, ryamarone@bloomberg.net, TEL: 212-617-8737
  3. 3. Economy Operating Well Below its Potential Real GDP (Blns) vs. Real Potential GDP (Blns) $14,500 $13,500 $12,500 $11,500 Potential GDP $10,500 Real GDP $9,500 $8,500 $7,500 $6,500 CBOPGDPR <Index>, GDP CHWG <Index> $5,500 1980 1985 1990 1995 2000 2005 2010 2015Source: BEA, CBO, BloombergRichard Yamarone, ryamarone@bloomberg.net, TEL: 212-617-8737
  4. 4. Employment To Be a Slow Train Coming Nonfarm Payroll Creation From Onset of Recession 102 100 98 73 - 75 96 1980 81 - 82 94 90 - 91 92 2001 07 - current 90 1 5 9 13 17 21 25 29 33 37 41 45 49 53 Source: BLS, NBER, Bloomberg MonthsRichard Yamarone, ryamarone@bloomberg.net, TEL: 212-617-8737
  5. 5. Employment To Be a Slow Train Coming -- II peak-to-trough % jobs lost Recession Date (months) total jobs lost (millions) months to job restoration peak-to-troughPeriod 1 1948-49 11 2.34 22 5.17 1953-54 10 1.71 23 3.33 1957-58 8 2.22 20 4.17 1960-61 10 1.19 20 2.16 1969-70 11 1.04 18 1.46 1973-75 16 2.17 19 2.70 1980 6 1.16 10 1.20 1981-82 16 2.84 28 3.09 AVG: 11 1.83 20 2.91Period 2 1990-91 8 1.62 32 1.40 2001 8 2.71 48 2.04 AVG: 8 2.16 40 1.72Period 3 2007-09 (current) 18 8.31 ? 6.03 Richard Yamarone, ryamarone@bloomberg.net, TEL: 212-617-8737
  6. 6. No Hiring by the Private Sector Unemployed Workers per Job Opening Total Private Hires, (thousands) 85,500 7 65,000 54,500 4 34,000 23,500 1 shaded areas are 03,000 2001 2003 2005 2007 2009 2011 2001 2003 2005 2007 2009 2011 Source: BLS, NBER, JOLTTOTL , USUETOT Source: BLS, Bloomberg HIREPRIV Richard Yamarone, ryamarone@bloomberg.net, TEL: 212-617-8737
  7. 7. No Words to Express this Stat Average Duration of Unemployment in Weeks 45.0 40.0 35.0 30.0 25.0 20.0 15.0 10.0 5.0 0.0 1948 1958 1968 1978 1988 1998 2008 Source: Bureau of Labor Statistics USDUMEAN <Index>Richard Yamarone, ryamarone@bloomberg.net, TEL: 212-617-8737
  8. 8. Little “Improvement” in Unemployment Benefit Claims Continuing, Emergency, and Extended Jobless Benefits (000) 12,000 10,000 8,000 6,000 4,000 2,000 0 2000 2002 2004 2006 2008 2010 2012 Source: U.S. Department of Labor INJCEUC, INJCEXB, INJCSPRichard Yamarone, ryamarone@bloomberg.net, TEL: 212-617-8737
  9. 9. Little Signs of Recovery…Richard Yamarone, ryamarone@bloomberg.net, TEL: 212-617-8737
  10. 10. Trusted Street Indicator Signaled ‘Double-Dip’ ECRI Weekly Leading Index Smoothed Growth Rate (%) 30 20 10 0 -10 -20 -30 1990 1995 2000 2005 2010Source: ECRI, Bloomberg ECRWGROW <Index> <GO>Richard Yamarone, ryamarone@bloomberg.net, TEL: 212-617-8737
  11. 11. Economy Set for An ‘About-Face’ Leading Economic Indicators (Y/Y%) vs. Real GDP Growth (Y/Y%) 8 12 10 6 8 6 4 4 2 2 0 -2 0 -4 -6 -2 -8 -4 -10 Series2 -12 -6 -14 LEI (rhs) GDP CYOY <Index> <GO>, LEI TOTL <Index> <GO> -16 -8 -18 85 95 05Source: Bureau of Economic Analysis, The Conference BoardRichard Yamarone, ryamarone@bloomberg.net, TEL: 212-617-8737
  12. 12. If GDP Dips to 2.0% -- It’s Recession Time Real GDP (Y/Y %) 14 12 10 8 6 4 2 0 -2 -4 -6 1948 1953 1958 1963 1968 1973 1978 1983 1988 1993 1998 2003 2008Source: NBER, BEA, Bloomberg GDP CYOY <Index> Richard Yamarone, ryamarone@bloomberg.net, TEL: 212-617-8737
  13. 13. Robust Fed Index Points to Sub-Par Performance Chicago Fed National Activity Index Three Month Moving Average 1.00 0.50 0.00 -0.50 -1.00 -1.50 -2.00 -2.50 -3.00 -3.50 -4.00 90 93 96 99 02 05 08 11Source: Federal Reserve Bank of Chicago CFNAI <Index>Richard Yamarone, ryamarone@bloomberg.net, TEL: 212-617-8737
  14. 14. Economic Deceleration Occurred During Early June Real GDP (Y/Y%) vs. Railcar Loads of Waste/Scrap (Y/Y%) 40 8.00 30 6.00 20 4.00 10 0 2.00 -10 0.00 -20 -2.00 -30 Railcar Loads (lhs) Real GDP (rhs) -4.00 -40 RAILWAST <Index> -50 -6.00 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 Source: Association of American Railroads, BEA, BloombergRichard Yamarone, ryamarone@bloomberg.net, TEL: 212-617-8737
  15. 15. Manufacturing Gains Not Generating Jobs Industrial Production Index, Manufacturing Jobs (000) 20,000 105 100 18,000 95 16,000 90 14,000 85 12,000 80 10,000 75 Mfg Jobs (lhs) IP (rhs) 8,000 70 1995 2000 2005 2010Source: Federal Reserve, BLS USMMMANU <Index>, IP <Index>Richard Yamarone, ryamarone@bloomberg.net, TEL: 212-617-8737
  16. 16. It’s 1941 For Manufacturing U.S. Manufacturing Employment (in thousands) 20,000 19,000 18,000 17,000 16,000 15,000 14,000 13,000 12,000 11,000 10,000 1940 1950 1960 1970 1980 1990 2000 2010Source: Bureau of Labor Statistics USMMMANU <Index>Richard Yamarone, ryamarone@bloomberg.net, TEL: 212-617-8737
  17. 17. Won’t Get Any Jobs from Housing Residential Construction Spending ($ mls) Construction Employment (thousands) 700,000 8,000 600,000 7,500 Spending (lhs) Construction Jobs (rhs) 7,000 500,000 6,500 400,000 6,000 300,000 5,500 200,000 USECTOT <Index>, CNSTRESI <Index> 5,000 100,000 4,500 Source: U.S. Department of Commerce, Bureau of Labor Statistics, Bloomberg 0 4,000 1993 1997 2001 2005 2009Richard Yamarone, ryamarone@bloomberg.net, TEL: 212-617-8737
  18. 18. This is what the Fed is Trying to Revive? Residential Investment as a Percent of GDP (%) 8 7 6 5 4 3 2 1947 1954 1961 1968 1975 1982 1989 1996 2003 2010Source: BEA PFIVRESI <Index>, GDP CUR$ <Index>Richard Yamarone, ryamarone@bloomberg.net, TEL: 212-617-8737
  19. 19. Housing Depression Continues Mortgage Bankers Associations Purchase Applications Index 550 500 450 400 350 300 250 200 150 100 2005 2006 2007 2008 2009 2010 2011 2012 Source: Mortgage Bankers Association MBAVPRCH <Index>Richard Yamarone, ryamarone@bloomberg.net, TEL: 212-617-8737
  20. 20. Home Prices Falling Again S&P-Case-Shiller Home Price Index AZ-Phoenix 300 CA-Los Angeles CA-San Diego CA-San Francisco CO-Denver 250 DC-Washington FL-Miami FL-Tampa 200 GA-Atlanta IL-Chicago MA-Boston MI-Detroit 150 MN-Minneapolis NC-Charlotte NV-Las Vegas 100 NY-New York OH-Cleveland Source: S&P/Case-Shiller OR-Portland 50 TX-Dallas 2000 2002 2004 2006 2008 2010 2012 WA-SeattleRichard Yamarone, ryamarone@bloomberg.net, TEL: 212-617-8737
  21. 21. Commercial Construction Slump Total U.S. Commercial Construction Spending ($ mlns) $100,000 $90,000 $80,000 $70,000 $60,000 $50,000 $40,000 $30,000 $20,000 1993 1996 1999 2002 2005 2008 2011 Source: U.S. Census Bureau CNSTCOMM <Index>Richard Yamarone, ryamarone@bloomberg.net, TEL: 212-617-8737
  22. 22. Retailers Headed Out of the Malls Regional & Strip Mall Vacancies 12.0% 11.0% Strip Mall Regional & Superregional Malls 10.0% 9.0% Source: Reis Inc. 8.0% 7.0% 6.0% 5.0% 4.0% 2000 2003 2006 2009Richard Yamarone, ryamarone@bloomberg.net, TEL: 212-617-8737
  23. 23. State & Local Governments May be a Ticking Time Bomb State & Local Government Employment (in thousands)14,800 5,25014,600 5,200 5,15014,400 5,10014,200 5,05014,000 5,00013,800 4,95013,600 4,900 Local (lhs)13,400 4,850 State (rhs)13,200 4,80013,000 4,750 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Source: BLS USEGSTSA <Index>, USEGLCSA <Index>Richard Yamarone, ryamarone@bloomberg.net, TEL: 212-617-8737
  24. 24. Earnings/Analyst Conference Calls
  25. 25. Bloomberg Orange Book Summary of Commentary on ____________________ Current Economic Conditions By CorporationNI ORANGEBOOK <GO> from earning statements commencing July 1, 2010 Richard Yamarone, ryamarone@bloomberg.net, TEL: 212-617-8737
  26. 26. What is Being Said… “And so were still seeing that midnight shopping in our stores when that EBT card, its like a debit card, when it is ready and it is funded, there are people who are in the store at midnight because they know it turns on. And they have shopped from like 10:45 to midnight and theyre waiting for that card and then our lines open up. And weve had some of our busiest ours at midnight.” Rosalind Brewer, EVP, Wal-Mart April 12, 2011“I think the most telling indicator for us that economic weakness and employment is the keyissue driving soft volumes, is the fact that we continue to see, as – in contrast to the historicalnorms, we continue to see volume pick up heavily at the beginning of each month, and thensteadily erode through the month, being particularly soft in the last week to 10 days of themonth. That just tells us that people are running out of money.” Gregg Engles, CEO Dean Foods May 10, 2011“Now clearly when it gets to the end of the month and theyve run out of dollars and thefirst of month gets there, youll see some pick-up in sales. I would say its not as dramatic asit was two years ago due mostly to the fact that not 100% of those benefits are gettingloaded on to peoples cards..” J. Michael Schlotman, CFO, SVP Kroger May 17, 2011 Richard Yamarone, ryamarone@bloomberg.net, TEL: 212-617-8737
  27. 27. It Pays to Read those 200 Transcripts… Fed Ex Total US Package Shipments (Y/Y%) vs. Real GDP (Y/Y%)GDP Packages 8.00 10.00 6.00 5.00 4.00 0.00 2.00 0.00 -5.00 -2.00 -10.00 -4.00 GDP (lhs) Fed Ex Shipments (rhs) -6.00 -15.00 1999 2001 2003 2005 2007 2009 2011 Source: Federal Express, Bureau of Economic AnalysisRichard Yamarone, ryamarone@bloomberg.net, TEL: 212-617-8737
  28. 28. Not Enough Fuel in the Tank Real Disposable Personal Incomes (Y/Y%) 8.00 6.00 4.00 2.00 0.00 -2.00 -4.00 -6.00 1990 1995 2000 2005 2010 Source: Bureau of Economic AnalysisRichard Yamarone, ryamarone@bloomberg.net, TEL: 212-617-8737
  29. 29. Not Enough Fuel in the Tank -- II Average Hourly Earnings (Y/Y%) by Industry Other Services Lesiure & Hospitality Education & Health Professional business svcs. Financial Activities Information Utilities Transportation & warehousing Retail Trade Wholesale Trade Manufacturing  PCED Inflaton 2.14% Construction Mining & Logging -1.0 0.0 1.0 2.0 3.0 4.0 5.0 Source: Bureau of Labor StatisticsRichard Yamarone, ryamarone@bloomberg.net, TEL: 212-617-8737
  30. 30. What Happens When the Stimulus Ends? Government Stimulus Driving IncomesIncomes in $ billions $10,500 $10,000 Real Dis Pers Inc Real Pers Inc Ex-Transfers $9,500 $9,000 $8,500 Source: BEA, Federal Reserve Bank of St. Louis, Bloomberg $8,000 2000 2002 2004 2006 2008 2010 2012 PIDSDCWT <Index>, PIDSPINX <Index>Richard Yamarone, ryamarone@bloomberg.net, TEL: 212-617-8737
  31. 31. Recession Comparison of Real Incomes Real Incomes Ex-Transfers From Onset of Recession 106 104 102 100 98 96 73 - 75 1980 94 81 - 82 90 - 91 92 90 2001 07 - current 88 1 5 9 13 17 21 25 29 33 37 41 45 49Source: BLS, NBER, Bloomberg MonthsRichard Yamarone, ryamarone@bloomberg.net, TEL: 212-617-8737
  32. 32. Collapse In Credit Card Debt, Still Uncertain Monthly Change in Consumer Revolving Debt ($ billions) 10 8 6 4 2 0 -2 -4 -6 -8 -10 -12 2007 2008 2009 2010 2011 2012 Source: Federal Reserve CICRRRTL <Index>Richard Yamarone, ryamarone@bloomberg.net, TEL: 212-617-8737
  33. 33. Persons Receiving Food Stamps at All-Time High Supplemental Nutrition Assistance Program Number of Participants 50,000,000 45,000,000 40,000,000 35,000,000 30,000,000 25,000,000 2007 2008 2009 2010 2011 Source: U.S.D.A, Bloomberg FDS PNUM <Index>Richard Yamarone, ryamarone@bloomberg.net, TEL: 212-617-8737
  34. 34. There is No Holy Grail of Economic IndicatorsRichard Yamarone, ryamarone@bloomberg.net, TEL: 212-617-8737
  35. 35. ‘Fab Five’ – Dining Out Spending: Dining Out(Y/Y%) 8 6 4 2 0 -2 -4 -6 98 01 04 07 10 RPCEDPMB <Index> <GO> Source: BEA, NBERRichard Yamarone, ryamarone@bloomberg.net, TEL: 212-617-8737
  36. 36. ‘Fab Five” – Jewelry & Watches Spending: Jewelry & Watches Y/Y% 16 12 8 4 0 -4 -8-12-16-20 98 01 04 07 10Source: BEA, NBER RPCEDJRY <Index> <GO>Richard Yamarone, ryamarone@bloomberg.net, TEL: 212-617-8737
  37. 37. ‘Fab Five’ – Cosmetics & Perfumes Spending: Cosmetics & Perfumes (Y/Y%) 9 6 3 0 -3 -6 -9 98 01 04 07 10Source: BEA, NBER RPCEDCOS <Index> <GO>Richard Yamarone, ryamarone@bloomberg.net, TEL: 212-617-8737
  38. 38. Richard Yamarone, ryamarone@bloomberg.net, TEL: 212-617-8737
  39. 39. ‘Fab Five’ – Women’s Dresses Spending: Womens & Girls Clothing (Y/Y%) 12 9 6 3 0 -3 -6 -9 98 01 04 07 10 RPCEDWGC <Index> <GO> Source: BEA, NBERRichard Yamarone, ryamarone@bloomberg.net, TEL: 212-617-8737
  40. 40. ‘Fab Five’ – Casino Gambling Spending: Casino Gambling Y/Y% 24 20 16 12 8 4 0 -4 -8 -12 -16 98 01 04 07 10Source: BEA, NBER RPCEDCAS <Index> <GO>Richard Yamarone, ryamarone@bloomberg.net, TEL: 212-617-8737
  41. 41. Trade Picture isn’t Looking Too Encouraging…Richard Yamarone, ryamarone@bloomberg.net, TEL: 212-617-8737
  42. 42. Trade Helped During the Housing Bust, But No Longer Convincingly Contributor Contribution to GDP Residential Spending & Trade 3 2.44 2.5 2.22 2.21 1.95 2 Residential Trade 2 1.55 1.5 1.37 1 0.79 0.44 0.42 0.42 0.5 0.43 0.38 0.4 0.5 0.24 0.25 0.1 0.15 0.09 0.03 0.06 0 -0.06 -0.01 -0.12 -0.1 -0.5 -0.27 -0.25 -0.26 -0.41 -0.34 -0.62 -0.55 -0.6 -0.59 -0.72 -0.73 -0.68 -0.76 -1 -0.91 -0.97 -1.13 -1.18 -1.21 -1.19 -1.5 -1.24 -1.26 -1.36 -1.43 -2 -1.97 -2.5 06 07 08 09 10 11 12 Source: BEA GDP %NETX <Index>, GDP%RES <Index>Richard Yamarone, ryamarone@bloomberg.net, TEL: 212-617-8737
  43. 43. Money Beginning to Enter Goods Market to ‘Chase too Few Goods’ C& I Loans Large Commercial Banks ($blns) 900 800 700 600 500 400 300 200 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Source: Federal Reserve, Bloomberg ALCBLCID <Index> Richard Yamarone, ryamarone@bloomberg.net, TEL: 212-617-8737
  44. 44. Inflation Not A Primary Concern Personal Consumption Expenditure Deflator (Y/Y%) 6 5 4 3 2 1 0 -1 PCED Core-PCED -2 90 92 94 96 98 00 02 04 06 08 10 12Source: BEA, Bloomberg PCE YOY <Index>, PCE DEFY <Index> Richard Yamarone, ryamarone@bloomberg.net, TEL: 212-617-8737
  45. 45. Richard Yamarone, ryamarone@bloomberg.net, TEL: 212-617-8737

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