June 2016

Oil Crashes on Brexit, Oil Imports at a 42 Month High, Record Gasoline Output and Usage

Oil prices crashed along with global financial markets on Friday following the British vote on Thursday to exit the European Union (typically referred to as "Brexit"), which is widely expected to precipitate a period of political instability in Europe.

George Will and the Failure of WASP Conservatism

Much is being made of the fact that George Will recently announced that he has left the Republican Party because of the nomination of Donald Trump. My initial reaction, and the reaction of many others judging by the responses I have seen, is "Good riddance." I have made my feeling about Mr. Will known in the past.

The Convention Coup Delusion

Since the NeverTrump forces have so far failed to attract a credible movement conservative approved independent challenger to run against Donald Trump and Hillary Clinton in the general election, their focus seems to have shifted toward an effort to nominate someone other than Trump at the Republican National Convention in July. This has been the steady drumbeat coming from such NeverTrump sources as RedState and Erick Erickson’s The Resurgent among many others.

May Retail Sales Boost PCE Contribution to 2nd Quarter GDP

Seasonally adjusted retail sales rose 0.5% in May after retail sales for March and April were revised slightly higher..  The Advance Retail Sales Report for May (pdf) from the Census Bureau estimated that our seasonally adjusted retail and food services sales totaled $455.6 billion for the month, which was an increase of 0.5 percent (±0.5%)* from April's revised sales of $453.6 billion and 2.5 percent (±0.7%) above the adjusted sales of May of last year.

Rent and Gas Raises CPI

The Consumer Price Index increased by 0.2% for May.  Gasoline alone increased another 2.3% for the month.  Inflation with food and energy price changes removed increased 0.2% with shelter and medical costs once again driving the increase.  From a year ago overall CPI has risen 1.0%.  Without energy and food considered, prices have increased 2.2% for the year.

April JOLTS Shows Job Openings Strong While Hiring Slides

The BLS April 2016 JOLTS report shows job openings once again matching their July 2015 record high.  Actual hiring though slid and openings now far exceed the number of people hired.  The Job Openings and Labor Turnover Survey history shows a new trend as job openings have surpassed actual hiring and this has been going on since February 2015.

A Record Low for New Foreclosures, Another Record High for Average Time in Foreclosure

The Mortgage Monitor for April (pdf) from Black Knight Financial Services (BKFS, formerly LPS) reported that there were 595,235 home mortgages, or 1.17% of all mortgages outstanding, remaining in the foreclosure process at the end of April, which was down from 630,766, or 1.25% of all active loans, that were in foreclosure at the end of March, and down from 1.63% of all mortgages that were in foreclosure in April of last year.

The Impact of April’s Income and Outlays, Trade Deficit, Construction Spending, and Factory Inventories on GDP

With the first Friday of the month, the Employment Situation Summary for May from the Bureau of Labor Statistics was obviously the most widely watched release of last week.  But the week also saw the release of four reports for April that give us the lion's share of that month's contribution to 2nd quarter GDP, and in some cases suggest revisions to 1st quarter GDP.

Record Low 4.7% Unemployment Rate Hides Ominous Signs

The May 2016 unemployment report on the surface sounds like great news.  The unemployment rate dropped to an astoundingly low 4.7%.  This is a -0.3 percentage point drop from last month and a level not seen since November 2007.  Yet the statistics which make up the unemployment rate actually shows something terrible.  The unemployment rate dropped because 664,000 people dropped out of the labor force with almost half a million no longer counted as unemployed.

The Renegade Party’s Underwhelming #FrenchRevolution

Over the Memorial Day weekend, prominent #NeverTrump leader Bill Kristol tweeted that they had an “impressive” candidate with a “real chance” poised to launch a movement conservative approved independent challenge to Donald Trump and Hillary Clinton in the general election. The NeverTrumpers have taken to calling their efforts the Renegade Party, although they are less a party in the political sense than they are in the sense of being a faction.