Week in Review
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Started by TimNew - March 27, 2021, 7:20 a.m.

Chicago Fed Natl Activity M/MFeb-210.66-1.09C-
Richmond Fed Mfg M/MMar-2114.0017.00C+
Kansas City FedMar-2124.0026.00C+
Durable Goods M/MFeb-213.40-1.10C-
Existing Home Sales M/MFeb-216.690M6.220MC-
New Home Sales M/MFeb-21923K775KC-
GDP Q/QQ4:204.104.30C+
Corp Profit Q/QQ4:2010.304.10C
Consumer Sentiment M/MMar-2183.0084.90C+
RedBook W/W3/20/20210.009.40C+
Jobless Claims W/W3/20/2021770K684KB-

A bit mixed,  but overall positive.

The overheated Housing Market continues to show some contraction. Inventory is low,  interests rates and bulding material costs are up. Still looks like an "adjustment" to me.  will continue to watch.

Durable Goods also contracted a bit after a long string of growth.  In addition to Housing,  could be early warning signs but too soon to tell.

Chicago Fed showed some contraction in Feb as well, but Kansas City and Richmond both had strong readings in March.

Corporate Profit was down,  but remain positive.  GDP, with another upward revision was a pleasant surprise. I had earlier thought we'd see downward adjustments.   I've been proven wrong in the last two reports.

Consumer Sentiment ticked up again, likely related to stimulus.

RedBook remains on a tear with some of the highest readings I've seen, again, likely stimulus related.

Jobless Claims finally came in below 700K, still far too high but a pandemic low and, IMO,  very good news.

My gut feel is that we started the year in the beginnings of contraction for the Jan/early Feb  timeframe,  but are begining to see signs of growth.  Let's see if I'm right over the next few months.  

I'll give the week another solid C+ and will lower the suck factor to 6.5 based on Jobless Claims and the somewhat upbeat GDP.   Of note, Atl Fed is calling for a respectable GDP of 4.7 for 2021:Q1.

Slide 1 (frbatlanta.org)

By metmike - March 27, 2021, 3:41 p.m.
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Thanks for the comprehensive and promising outlook:

Here's what you gave us exactly 1 year ago today:

        Week in Review            

                            Started by TimNew - March 27, 2020, 11:48 a.m.            


By TimNew - March 27, 2021, 7:46 p.m.
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Wow.   We were on the cusp of terrible times.  Looking better now  :-)

By wglassfo - March 28, 2021, 9:37 a.m.
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I don't know if you want these comments in your post or else where Tim

IMO I think unemployment will continue to disappoint if Int rates stay low. Powell has said int will stay low until 2023 and then it depends on unemployment numbers. No mention of inflation except higher inflation would be welcome on an average of past yrs. Thus we could have 3.5 % inflation but an average of 2 % over the last 5-7 yrs and continue with low int rates for a bit longer

On our farm we are replacing hired help with bigger machinery and I expect many operations such as Amazon where you just pick items off a shelf to fill the order, robots would give a ROI of maybe 5 yrs and paid for if the worker earns 30K [15 minimum] plus holidays and phone in sick at the last minute etc, the robot looks good if the ROI is 5 yrs with low int rates. 8 % might take 8-10 yrs ROI and a different calculus robot vs 15 hr minimum

We don't fill orders off the shelf but with low int rates, some as low as 0.9 % we have a ROI in 3 yrs. Thus we are buying huge machines and not hiring as many employees to operate smaller equipment. We don't have the worry of some body causing damage and down time to repair. We are slowly buying the biggest we can and doing as much as we can, our selves, especially with a ROI of 3 yrs. One machine every yr and paid for in 3 yrs. Of coarse the depreciation write of helps with income tax but income tax is not why we buy large equipment. It is the human element of down time we can not afford.

So long as int rates reman low I think people will be replaced with robots and AI to do much of the work people do today

Thus my thinking with the Feds stated goals unemployment will remain high and a drag on the economy. Then we get into UBI and that means either higher taxes for those who pay income tax or higher deficits. Probably both which may not help the economy as the number of consumers for more than basic essentials is limited to a shrinking middle class

Just my thoughts over longer time frame and what is happening in our community with larger farmers.

We are not large farmers but replacing hired help with low int capital is the choice we made.

By TimNew - March 28, 2021, 10:12 a.m.
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AI/Automation will certainly be a factor going forward and will be exacerbated if the minimum wage gets pushed up.  But I expect that be more long term, and hopefully something to which we'll adapt.

Comments are welcomed and encouraged.  I don't think of this as a monologue.