There are also signs that mortgage-backed securities are beginning to trade again. That's what we need to fix the problem. Don't hyperventilate yet but this report is OK, Dog.

JR

As I wrote out last week, the big jump the week before was caused by the impact of the American Axle strike, which forced a number of auto assembly plants to close, resulting in 42K layoffs. This week's number, 357K, is based on data collected a week after the layoffs, which gives us a clearer picture of the demand forces at work in manufacturing. The 4 week moving average of 378K is consistent with slow, positive GDP growth but not consistent with the negative GDP growth we would need to be a recession.

JR

JR

Interest rates on new car loans at banks (7.27%) are down from their peak (7.92%) a year ago, but not nearly as much as the Fed funds rate. Auto finance company rates (5.37%) are substantially higher than they were as recently as December (4.33%). Credit card rates (11.40%) are down a full percent from a year ago (12.57%).

Apparently these guys did not get the memo about Fed ease and falling Fed funds rates. They did get the memo, however, about falling used car prices and rising credit card risk. tough time to have to borrow money.

This report is consistent with slow, positive growth. Reports of the death of the American consumer have been exaggerated.

JR

PS: This report of a +2.4% increase in February consumer credit was brought to you by the miracle of seasonal adjustment. The actual number ($2538.6 billion) is down a little from January ($2555.8 billion), just down less than the normal January-February drop. I am always skeptical of seasonally adjusted numbers. This one too.

Nearly 40 percent Egypt's 76 million people live below or near the poverty line of $2 a day. The prices of staples such as cooking oil and rice have nearly doubled in recent months, amid widespread shortages of government-subsidized bread.

Thousands of demonstrators angry about rising prices and stagnant salaries torched buildings, looted shops and hurled bricks at police who responded with tear gas Sunday in a northern industrial town as Egyptians staged a nationwide strike. You can read the full story here, Egyptian Workers Riot Over Rising Prices.

I don't like either party's approach to trade. Overall trade raises GDP and incomes, but it helps some people and hurts others, especially during the period when industries, companies and workers have to adjust to new patterns of production and work. We don't want it to go away. We couldn't make it go away anyway--it is the law of gravity. But we can do things to make the adjustments easier on people. I wold like to scrap all the rhetoric and see a reasoned discussion of how to best live in today's global economy. It's pretty clear to me that we want to get as much capital as possible to (voluntarily) locate in the U.S. And we want to help prepare people for the most productive work.

JR

There’s nothing like international trade to help bridge the nation’s ideological divide. As Barack Obama and Hillary Clinton travel the Rust Belt, the Democratic candidates seem to be eschewing the advice of their economic advisers and turning to Karl Rove’s playbook.

The 80K job loss number was not a complete shock. The day before, we saw 407K initial unemployment claims--a big number. It is worth noting, however, that 51K of the jobs were lost in construction due to the housing crunch. And 42K jobs in March were lost as a result of the American Axle strike that shut down a number of auto plants.(The strike was on March 10; the initial claims number was for the week of March 12). Together, that accounts for -93K jobs in March.

Bottom line. Medium ugly but more consistent with modest positive growth than falling GDP. I still think we will see 1%-ish Q1 growth with a pickup after that.

JR

Non-manufacturing business activity increased for the second consecutive month. The New Orders Index increased 0.6 percentage point to 50.2%, and the Employment Index contracted for the third consecutive month, remaining at 46.9%. The Prices Index increased to 70.8% in March, indicating a faster rate in price increases than in February. According to the NMI, 11 non-manufacturing industries reported growth in March. Members' comments reflect concern about rising fuel and energy costs and the impact they are having on commodity prices.

JR

Note that this report measures initial claims for the week of March 12. That number is inflated because the American Axle strike that shut down a number of auto plants took place on March 10. That makes the number not a reliable indicator of the strength of product demand.

The advance number for seasonally adjusted insured unemployment during the week ending March 22 was 2,937,000, an increase of 97,000 from the preceding week's revised level of 2,840,000. The 4-week moving average was 2,859,000, an increase of 32,250 from the preceding week's revised average of 2,826,750.

JR

Last year I wrote a paper for the International Finance Forum Journal likening protectionism to the turbulence that is created when fluid flows more rapidly through a cylinder. It is the result of increased velocity in the presence of friction. In the case of protectionism, it is faster global growth and faster capital flows in a world where it is costly for people to change jobs and careers. It is a side-effect of faster growth--a good thing. But we must find a way to manage it by reducing frictions via education, job training and relocation assistance.

JR

JR

Future growth of income, productivity and jobs will depend on who has the best information and communications technology, because high-speed communications allows the economy to perform as a massive parallel-processing information network. Hats off to China and India for making R&D and investment in new networks a priority. Wouldn't hurt if the U.S. government were a positive force for investment here too.

JR

JR

This week's number is further support for the view that we are stuck in a range of low but positive growth. Bet this goes on for a while.

JR