Economy

Mortgage Applications Falling, Consumer Credit Balances Rising

Jun 8, 2022 1 min read paid

The housing market may be falling into a recession, but consumers continue to spend—though they have needed to borrow more to do so. The seasonally adjusted purchase Index for mortgage applications, compiled by the Mortgage Bankers Association, decreased 7% w/w and 21% y/y during the week ended June 3. Record-high home prices combined with this year’s spike in the mortgage rate to 5.40% have clobbered

Ed Yardeni

Leading Indicators Up, GDP Revision Down

Jun 7, 2022 2 min read paid

We have a mix of good and bad news this morning for you. We will start with the good news: Two of our favorite leading economic indicators—i.e., payroll employment in truck transportation and in temporary help services—rose to new record highs during May, according to Friday’s employment report (charts below). Both are highly correlated with the Index of Leading Economic Indicators, which is available through April.

Ed Yardeni

The Economic Week Ahead 6/6/2022

Jun 4, 2022 1 min read

On June 1, JPMorgan Chase CEO Jamie Dimon said that “fiscal stimulation is still in the pocketbooks of consumers. They are spending it.” We agree: Consumers have about $1 trillion in excess saving thanks to the government’s pandemic relief checks that weren’t spent. They’ve been dipping into that pool of money to offset the weakness in the purchasing power of their paychecks, which have been eroded by

Ed Yardeni

Mixed Indicators Showing Slowing Economic Growth

Jun 3, 2022 2 min read

We are seeing some very odd divergencies between the averages of the regional business surveys conducted by five Federal Reserve Banks and the national survey of manufacturing purchasing managers conducted by the Institute for Supply Management. In the past, the regional and national indexes for overall business, new orders, and employment tracked one another very closely. Now, not so much: (1) During May, the regional composite index fell to 0.

Ed Yardeni

Beware of Wildlife

Jun 1, 2022 1 min read

On our first day at Yellowstone National Park yesterday, my wife Valerie and I spotted lots of bison, but no bears. I believe this is a bullish omen for the stock market. They were all grazing quietly. We hope to see some bears today. Hopefully, they won't pose a menacing threat to us. Of course, at Yardeni Research, our outlook for the economy and financial markets isn'

Ed Yardeni

The Economic Week Ahead 5/7/22

May 30, 2022 1 min read

The week ahead is a big one for business surveys and for employment during May: (1) The last of the five regional Fed banks’ business surveys will be released on Tuesday. The four available ones showed a sharp slowdown in business activity, suggesting that Wednesday’s M-PMI will also be weak even though the flash M-PMI estimate remained strong. The regional surveys also showed that prices-paid and prices-received indexes remained

Ed Yardeni

No Recession in GDPNow Tracking Model

May 30, 2022 1 min read

There’s no recession apparent in the May 27 update of the Atlanta Fed’s GDPNow tracking model for Q2. The real GDP growth “nowcast” was revised up slightly to 1.9% (saar). Consumer spending is tracking at a solid 4.8%. Business spending on equipment was revised down sharply to only 2.8%. Weighing most on Q2 economic activity in the Atlanta Fed model is a 5.6% decline

Ed Yardeni

Are the Economic Fundamentals Bullish or Bearish for the S&P 500?

May 28, 2022 2 min read

There is a remarkably close fit between the yearly percent change in the S&P 500 stock price index and the national manufacturing purchasing managers index (M-PMI). The latter is available only through April; the reading for May will be released next week, on Wednesday, June 1. However, the M-PMI is highly correlated with the general business indexes of the regional business surveys compiled by the Federal Reserve Banks

Ed Yardeni

How Worrisome Is April’s Drop in M2?

May 25, 2022 1 min read

How worried should we be about April’s $81.2 billion drop in M2? And what about the $91.2 billion drop in demand deposits from January through April? Furthermore, the Fed is about to start a second round of quantitative tightening (QT2) in June. Won’t that dry up liquidity, causing a recession and further stock market losses? Maybe, but: (1) M2 is still more than $3 trillion above

Ed Yardeni

GDPNow Nowcast Down, New Orders Up

May 25, 2022 1 min read

First the bad news: The Federal Reserve Bank of Atlanta’s GDPNow model estimate for real GDP growth is 1.8% (at a seasonally adjusted annual rate), down from 2.4% on May 18. The Atlanta Fed’s “nowcast” for Q2 gross private domestic investment growth decreased from -1.8% to -4.8%, reflecting weak housing indicators. The good news is that new orders for manufactured durable goods increased 0.

Ed Yardeni

The Economic Week Ahead 5/23/22

May 22, 2022 1 min read

The week ahead will provide us with two more regional business surveys for May conducted by the Federal Reserve Banks of Richmond and KC.

Ed Yardeni

The Economic Week Ahead 5/16/22

May 15, 2022 1 min read

It is a big week ahead, promising to provide lots of insights into the strength/weakness of the US economy. Two Fed regional business surveys—for NY and Philly—will be released for May.

Ed Yardeni

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