Armada Intelligence » U.S

The Shifting Debt $

karen — Wed, 15 May 2013 17:37:34 +0000

It isn’t so much that Americans are any more or less in debt than they were before but the nature of that debt is changing and this has implications going forward. For decades the pattern was roughly the same – Americans used their access to credit to sustain lifestyles that they could not quite afford. There was heavy use of revolving credit and credit cards to pay for items that were too expensive to buy outright, heavy use of traditional debt to pay for cars and boats and equity loans to pay for home upgrades. Americans have never been shy about mortgages and will take on 30 year obligations when they are pushing 70. The recession altered a lot of assumptions about debt but after four or five years there are signs that people have reverted back to old ways in some regards and in other cases they are adding debt in areas they had not been heavily engaged in before.

The latest data shows that people are

Is the Stock Market Killing M&A Activity? $

karen — Fri, 10 May 2013 19:15:57 +0000

One of the metrics that typically will spike just before aggressive economic recovery is the merger and acquisition sector. Many analysts will use M&A as a barometer for robust recovery. But this period of time could be different.

As Chris wrote about on Tuesday, there are significant volumes of foreign investment now flowing into the

No Real Connection Between Getting Unemployment and Looking for Work $

karen — Wed, 08 May 2013 14:42:16 +0000

It is amazing how often an article of faith is accepted as true. Since the beginning of the downturn it has been suggested that giving people extended unemployment benefits would keep them from taking a job – that they would rather not work and get the check than take a job that wasn’t to their liking. Now there is a study from economists at the San Francisco Fed and Princeton University that shows that there is actually no connection and that job seekers were not much influenced by the receipt of an extended unemployment check.

The observation was that most people strongly desired an opportunity to get back

US Auto Sales Surprise Us, Others Not as Happy $

karen — Fri, 03 May 2013 18:09:42 +0000

O.K that was an odd headline. The bottom line is that we had actually expected sales to be a bit weaker than what US automakers reported for April – and yet many others were disappointed. Looking at US auto sales for April, they were up 8.5% versus expectations of about 11%. According to the accurate carload report from the AAR, year-to-date shipments of autos are only up about 3% – so getting an 8.5% increase in sales volume is nice and surprising to us.

Also consider this: last year we saw double-digit increases over 2011 volumes all year long. Seeing a growth rate vs. 2012 near 10% is strong to us – especially when we consider that more than 500,000 Americans left the workforce in March alone. The U6 unemployment rate is still near 13% – so the segment of the US population that 1) can afford a new car and 2) needs a new car is a smaller segment – every month under the current economic condition. Throw in a “Spring Swoon” and it is not surprising at all that

Trying Something a Bit Different $

karen — Fri, 03 May 2013 16:29:13 +0000

This will be the worst pictogram in the history of pictograms. But, we are going to allow statistics to tell our story. There are a series of 5 charts following that show you how certain outlets will use data and statistics to tell whatever story they want to tell. A good friend of ours put this bug in our ear. Depending on which of these charts you want to pull, you can tell a different story. Every one of these charts shows you the Baltic Dry Index – just pulled for different time frames. As we think about commodities, the BDI is the relative price to ship those commodities. The higher the price, the higher

Unemployment Figures Improve in April? $

karen — Fri, 03 May 2013 16:15:27 +0000

We won’t even begin to justify the headlines by showing you what they say. You won’t be able to hit a newspaper or website without seeing the positive strokes being given to the economy. The president is touting the numbers, the Republicans are using it to show that they were right about the sequester and it really isn’t having an impact, blah blah blah. Everyone is using it to their benefit today.

The big headline figures show that the unemployment rate fell in April from 7.6% to 7.5% and the economy created about 165,000 jobs. This was easily 35,000 jobs more than expected and the BLS even came out with a revision that boosted last month’s employment figures significantly.

So, based on pure economic factors – congratulations, our jobs report that helped add 175 points at one point today on the DJIA is at a rate commensurate with a 2% GDP growth rate. Inflation is supposed to be 1.9%! Yet, we set a new record on the DJIA.

Manufacturing and construction didn’t add a single net new job in April.

The U6 rate is the most important figure for gauging consumer spending and the ability of job creation to stimulate spending. The U6 is

Funny How Demand and Supply Works $

karen — Wed, 01 May 2013 18:03:10 +0000

There is more and more to get excited about in the housing sector as the price of homes keep rising – 9.3% over what they were in February of last year. The prime reason for this surge is good old-fashioned supply and demand as there are far more people interested in making the leap into home buying at the same time that there are fewer and fewer properties available for sale. The big bubble of foreclosed homes is now

US Housing Market Update $

karen — Wed, 24 Apr 2013 19:48:39 +0000

We chose that headline carefully, because the mainstream is throwing a lot of different notions at you. “Biggest gain in new home sales since 2008”, “housing booming”, “housing rebound robust”, etc. You get the idea.

Yes, new home sales rose 1.5% to reach an annualized rate of about 417,000. And yes, we have to admit that the US economy is selling new homes at a rate that is about 65,000 units a year faster than it was at this time last year. This is growth and yes, this is improvement.

We aren’t trying to be “glass half empty” folks. But, we owe it to you to keep things in perspective. When we compare the number of new homes sold to historical rates – the market is still woefully underperforming. There is no other way to say it. Even a comparison to a dismal 2008 is a poor practice. The housing market started plummeting in

Philly Fed Index Disappoints the Market $

karen — Fri, 19 Apr 2013 19:38:59 +0000

The latest report from the Philly Federal Reserve on manufacturing and business activity in its region showed that it declined in April, hitting a reading of 1.3 which was down from 2.0 in March. Analysts had expected the index to actually rise to a reading of 3.3 – so this was a highly disappointing development. New Orders dipped from .5 points to -1.0 while shipments were up to 9.1 in April – much higher than 3.5 in March.

If performance in previous months is any indication, we are getting a lot of variability between the various Federal Reserve Districts and what we see at a national level. Perhaps some of the biggest take-a-ways

Consumer Price Index: Prices “In-Check” $

karen — Wed, 17 Apr 2013 14:26:11 +0000

Maybe one of the best ways to characterize inflation pressures on the consumer is to say that they are “in-check”. The CPI moved down by .2% in March. What is pretty evident is that a drop in