Jack Dunn - Reclaiming Common Sense

This week was a rather slow week for economic data. This means that the rest of the media had time to obsess over the first 100 days of the Trump Presidency. The problem is that the Jobs data for January was collected on January 12th, eight days before taking office. His first Jobs Report was the February Jobs Report. His second jobs report was the March Report and his third report will be released this upcoming Friday. The same thing could be said regarding the New home Construction Reports, The New Home Sales Reports, the Existing Home Sale Reports, the Monthly and Annual Retail Trade Survey (MARTS) data, the CPI data and "any other report" that is released. Another problem is that it takes at least three points to reveal a trend.


If we were to compare the first 100 days of President Trumps economy where we added a record level of non-seasonally adjusted Current Population Survey (CPS) jobs for the month of February and another record level of combined full-time and part-time jobs added during March then we might have a better picture of our potential that is being unlocked. The rest of the media obsesses over the seasonally adjusted Current Employment Statistics (CES) "worker" data. They call it jobs data - it is really worker data.  This CPS data is recording a rebound in the workforce participation rate even as unemployment falls. Remember, unemployed workers are participant.


(April 26) Sometimes this column is influenced by other writers. There has been a considerable amount of ink and airtime spent on the "Retail Ice Age." The question is whether or not we are in an Ice age or a period of redefinition. Last week we received the MARTS report for March. Some sectors in the retail market are surging  while some do not have the same level of sales that they had during March 2016 or even March 2007. This week this column examined the job levels in those sectors.  "Retail Job Ice Age or Golden Age" found similar patterns in jobs data. As for the Restaurant Recession, it is not visible in the Leisure and Hospitality Jobs data.


(April 27)  One of the key economic indicators is the new home sales data. Last week we received the new home construction data. New home Starts and Completions are still recovering. New Homes under construction are at a near record high for the month of March. We also received the existing home sales data for March last week.  Units sold are near the pre-recession highs for the month of March and the Average Sales Price spiked as inventory of existing homes remains at near historic lows, regardless of month.This week we received the new home sales data for March.The data looks fairly good. The problem is that the 12 month trend is better than where we have been for the past decade and worse than it was March of 1992 through March of 2008. The new home sales data was worse than we may have been told.


(April 27) Thursday was the release of the weekly unemployment claims data. Instead of discussing 17 year lows for first-time unemployment claims and continuing claims, again, and explaining how this is an unintended consequence of an elevate level of people working part-time jobs and an elevated level of people working two jobs, this column published an article regarding Friday's upcoming Gross Domestic Product (GDP) report. This author used to be a Realtor. When working with buyers and sellers part of my job was to manage expectations - that way they new a good deal when they saw it. First Quarter has been a sluggish quarter. We have seen negative Annualized GDP rates during the first quarter four of the past nine years. The real GDP, the same quarter annual data,  has been under two percent seven times since 2005. The net net of "What to Expect from First Quarter GDP" was that we could see a relatively strong annualized GDP rate (1.5%-2.0%) and the Real GDP could be even better  (1.7%-2.3%)


(April 28)  So what happened to the GDP? It disappointed people who did not read my forecast column.The majority of the coverage was "GDP comes in at 0.8% - disappoints - now back to our coverage on Michael Flynn, Korea, and Trump's first 100 days." This week we saw that the Annualized GDP was better than 2011Q1 and 2014Q1, it was better than those first quarters that were negative, and it was equal to 2016Q1 from last year.  The Column "First Quarter Annualized GDP Okay, Real GDP Strong" found that the Real GDP edged down to 1.9% - within expectations. This column also includes data on Income Levels, Net Income Levels, Net Saving rate, Capital Improvement Expenditures and other data than the headline hypothetical Annualized GDP  growth rate and the severely lagging Real GDP for the past twelve months .


Next week we will receive the beginning of the data that will round out the "first one hundred days of data." This column will generate an article projecting potential changes in the CPS and CES data. There may even be one more report on the March data - the "Red, Gray and Blue" employment and unemployment data by age group. It will also attempt to get out the unemployment claims data from last week - even though it rarely receives a mention elsewhere. 


We need 100 days of data to measure one days in office. Just remember that we were in a tailspin for the first year that President Obama was in office and we are departing the gate on-time and flying with tail winds right now. We live in  a non-seasonally adjusted world. Our pay doesn't change month to month for the same job, unless you work on commission. We cannot exclude the volatile food and energy expenses when we feel like it.


It's the economy.