The Obama 2015 Budget is finally here with the usual fanfare of a thud, dud, not gonna happen political reality. Earlier we received previews where the Obama administration finally dropped chained CPI from their proposals. The 2015 budget proposed is $3.9 trillion dollars.
The February current population survey unemployment report is just plain weird and it is not due to weather. First, the unemployment rate is an artificial 6.7%. The unemployment rate increased by 0.1 percentage points due to more people being officially counted as unemployed. Yet, the employment level is basically static, almost unchanged from last month, along with the labor participation rate.
Yet another Senate report, yet another bank is busted for tax evasion. The Senate permanent subcommittee on investigations has released a report on Credit-Suisse bank detailing their systemic offshore tax evasion of U.S. funds.
ADP's proprietary private payrolls jobs report gives us a monthly gain of just 139,000 private sector jobs for February 2014. January was revised downward significantly, from a solid 175,000 jobs initially reported to just 127 thousand for the month. Moody's blames the weather for the poor showing, which probably is part of the reason.
The Obama administration is finally abandoning their endorsement of chained CPI for next years budget. The reason is probably not good economics, but political. Election season is near and this is just one of many policies the Obama administration endorsed which raised the ire of the retired. A refresher, chained CPI is another method to adjust for cost of living increases at a reduced rate than what is currently used, CPI-W.
Economic theory teaches that free price and profit movements ensure that capitalism produces the greatest welfare for the greatest number. Losses indicate economic activities where costs exceed the value of production, thus investment in these activities is curtailed. Profits indicate economic activities where the value of output exceeds its cost, thus investment increases. Prices indicate the relative scarcity and value of inputs and outputs, thus serving to organize production most efficiently.
Warren Buffett (worth $58.5 billion) was not joking about winning the class war. Before the Great Recession (in 2006) Warren Buffett had said "they were winning". But in the aftermath of the Great Recession (in 2011) he said "they won".
The February ISM Manufacturing Survey somewhat recovered from last month's plunge. PMI rose by 1.9 percentage points to 53.2%. This range is really mediocre growth for manufacturing. New orders did rebound with a 3.3 percentage point increase. Yet production just completely imploded, the second month in a row. Many blame the unusually bad weather and freezing cold.
Having the mightiest military, more powerful than the world has ever seen, doesn't make America exceptional. An ever expanding middle-class, equal opportunity for all, fairness in the political process and worker's rights was what had also made America exceptional since World War II—when the rising tide of capitalism had once lifted all boats. Now it just lifts the biggest yachts.
Q4 2013 real GDP was revised significantly downward from the original 3.2% to a weak, measly 2.4%. Personal consumption expenditures was revised down over half a percentage point of GDP. The original estimate for exports was also revised down over a quarter of a percentage point. If the Q4 downward revision in consumer spending isn't bad enough, for all of 2013 annual real GDP was just 1.9%. In 2012, annual GDP was 2.8%.
The anonymous Obamacare expert, who provided us a year ago with the most complete account of Obamacare available, has returned with an explanation of estate recovery. Obamacare herds the poor into Medicaid which requires some enrollees to forfeit homes and other assets they might have to the state to cover the cost of their medical care. The research article below is meticulous and demonstrates that Obamacare was not enacted to serve the people.
The Durable Goods, advance report shows new orders declined by -1.0% for January 2014, but December 2013 new orders were revised downward to a -5.3% plunge. The better news of this report is core capital goods increased by 1.7%. For the last three of four months durable goods new orders as a whole have declined.
Whether ideologically or politically motivated, economists and politicians on both sides of the aisle have been debating as to the reason for the falling labor participation rate.
January 2014 New Residential Single Family Home Sales increased 9.6% to 468,000 in annualized sales. This change is well within the statistical error margin of ±17.9%. This is the highest level of new home sales since July 2008. New single family home sales are now just 2.2% above January 2013 levels, but this figure has a ±20.2% margin of error.
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