The labor market isn’t stabilizing
The phrase of the day is “labor market stabilization.” After the payroll number beat expectations (256k versus 165k expected) and the unemployment rate dropped 0.1%, many analysts have declared that the labor market is stabilizing. But, given that the payroll number only improved 29k versus…
Economic data is changing and yields will soon follow
As everyone is thinking about what Trump’s administration means for inflation, the real story for interest rates is the economic data. Economic data rose immensely from August through mid-November bringing interest rates and a hawkish Fed narrative with it. The Lantern Daily Economic Index (LDEI)…
“Well, the data happened”
A telling interview from Mary Daly on Friday. Mary Daly, President of the San Francisco Fed District (nearly a quarter of U.S. GDP, 23.5%), was interviewed by Bloomberg on Friday. In it, she emphatically said that economic data was what changed her opinion since September,…
The Fed near the top of a wave
The Fed was hawkish today causing the 2-year to rise 13 basis points, but this tone and economic projections are entirely based on the “mini-boom” that’s occurred since August which is not durable. Powell made this distinction in an answer to a question about the…
LDEI Index Description
As many of you know, I have been working on an index this year, the Lantern Daily Economic Index, to show how economic data is evolving daily. I’ve long felt that economic data drives interest rates more than is appreciated and now I can prove…
Service-sector, Powell, and the Beige Book
Three important things today: service-sector ISM, an interview with Jerome Powell, and the Beige Book 1. The service sector PMI (purchasing manager’s index) from the Institute of Supply Management was released this morning, falling almost 4 points from its last reading to 52.1 from 56.0….
The LDEI is more reliable than the Citi Surprise Index
Currently, those wanting to see real-time trends in economic data turn to the Citi Economic Surprise Index. Many strategists use it because it is the only tool, until the Lantern Daily Economic Index (LDEI), to track real-time aggregate economic data. In the latest FOMC meeting…
Economic data are rounding over and so are yields
Happy Thanksgiving everyone! On balance, since November 12th when the NFIB small-business survey was released strong, economic data has been coming back down again. This has been seen in retail sales (less autos), housing starts, permits, new home sales, durable goods orders (less transportation), and…
What does the LDEI index level mean?
Unlike the Chicago Fed National Activity Index, the Lantern Daily Economic Index (LDEI) includes real and inflation data. This better reflects the “totality of the data”. The chart below shows how the LDEI compares to nominal GDP (QoQ%) over its history. They are very similar,…
Powell not that hawkish and more
Jerome Powell spoke and had a Q&A session with Catherine Rampell of the Washington Post in Dallas yesterday. Here is what I noticed. In the opening remarks, Powell emphasized the idea that the economy is good, each meeting is not pre-determined, and that the committee…