08 Apr 2005

Posted at 15:20h in The Friday Brief by
The buzz continues about the potential for increasing oil prices to ruin the economic expansion.  Indeed when oil prices fall, stocks go up and vice versa.  With crude just under $54.00 economists have had to revise their opinions of what price would trigger recession.  According to the Wall Street Journal, last summer, one-third of economists who participated in their survey said a recession would follow if crude-oil stuck between $50 and $59 a barrel, the range traded since late February.  In the latest forecasting survey, none of the economists feel that $50 oil will trigger a recession. About 31% said oil would have to be sustained at $80-$89 a barrel to snuff out growth, while 48% believe crude would have to top $90.  In inflation-adjusted dollars that is the level oil reached back in the 70’s during the oil embargo. 

02 Apr 2004

Posted at 16:49h in The Friday Brief by
The U.S. economy added 308,000 jobs in March, almost three times economists’ expectations and the largest gain since April 2000.  Treasury Secretary John Snow said “strength is apparent across the board, including strong job growth in construction, retail, and business services.”  The increase follows gains that were revised upward to 46,000 for February and 159,000 for January.  Manufacturing may soon be joining the party as this was the first month without a decline since August 2000.  The Unemployment rate rose to 5.7% from 5.6% as more people returned to the labor force to seek jobs. 

31 Oct 2003

Posted at 10:53h in The Friday Brief by
The economy grew 7.2% from July through September.  That’s the fastest growth rate since 1984 and more than twice that of the second quarter.  For the first time in history, the economy exceeded $11 trillion, before adjustments for inflation, according to Bloomberg.  Consumers spent at the fastest pace in six years and businesses showed strong increases in fixed investments.  Numerous retailing managers have said their businesses improved noticeably after President Bush signed the tax-cut bill into law in July.  Non-retailers are also joining the recovery.  Profits of 375 members of the S&P 500 companies are up an average 22%. 

10 Oct 2003

Posted at 11:05h in The Friday Brief by
A perfect “10” this recovery is not.  On this tenth day of the tenth month business leaders, investors, and economists remain confused by the indicators of this economic recovery.  While the government reports are released like clockwork, the information they contain is not quite so predictable.  Yes, the overall economic trend remains positive and new data increasingly confirm the trend’s direction, but outliers and contradictions continue to confuse expectations.  Fortunately, we are at the early stages of the third quarter earnings cycle.  In the coming weeks we will gain a better understanding of the health of American business and their managers’ expectations for the future.