James Pethokoukis

Yes, there are still some mustard seeds out there …

June 23, 2009

Mike Darda of MKM Partners spys some of them:

1) The ratio of leading to coincident indicators is up nearly 5% since bottoming in October, a magnitude not seen outside of economic recoveries going back to 1960.

Why Obama’s big economic gamble is failing

June 19, 2009

A string of new polls seems to show that America’s belief in the wonder-working power of Obamanomics has begun to fade. A Pew poll found President Obama’s economic approval rating has fallen to 52 percent from 60 percent in April. A Wall Street Journal poll found 53 percent disapprove of his handling of GM and Chrysler vs. 39 who approve. And the New York Times found that 60 percent don’t think Obama has a “clear plan” to deal with the monstrous budget deficit.

Recessions and entrepreneurs

June 15, 2009

A great study on recessions and creative destruction from the Kauffman Foundation:

An improving job market? Maybe not

June 10, 2009

The below chart, highlighted by Jeffrey Frankel of RGE Monitor, provides a counterpoint to the idea that the labor market is improving and employers are gearing up to hire. If they were, wouldn’t they first push their folks to work more hours?

A somewhat more bullish outlook

June 9, 2009

From Macroeconomic Advisers:

GDP declined at a 5.7% annual rate in the first quarter following a 6.3% decline in the fourth quarter of last year. Together, these declines constitute the second sharpest two-quarter decline in GDP in the postwar period. But a bottom in GDP is forming, and we look for a modest 0.9% decline in the second quarter followed by moderate growth in the second half of this year and above-trend growth in 2010 and 2011. The sources of the rebound continue to be the aggressive monetary and fiscal policy responses under way; the success in Treasury’s efforts to recapitalize the major banks and to provide sufficient capital buffers, if necessary, so that banks are more likely to make loans; diminished drag from housing and credit conditions; and a rebound in equities that is already under way. In this forecast, the unemployment rate peaks at 9.6% at the end of this year and declines only slowly thereafter. Inflation falls significantly, and the FOMC is expected to maintain a near-zero federal funds rate for a very extended period.

Roubini: 9 reasons why the recover will be a bust

June 9, 2009

Nouriel Roubini tries to grind his heel into the green shoots:

First, employment is still falling sharply in the US and other economies. Indeed, in advanced economies, the unemployment rate will be above 10% by 2010. This will be bad news for consumption and the size of bank losses.

SF Fed: Near 11 percent unemployment and a jobless recovery

June 9, 2009

The San Francisco Fed paints a gloomy outlook for the U.S. labor market with unemployment hitting near 11 percent next year and above 9 percent through 2011(bold is mine):

If economy improves, does GOP have a plan B?

June 8, 2009

Over at NRO, my pal Ramesh Ponnuru looks at all the green shoots and mustards seeds and wonders the following:

A salad of green shoots and mustard seeds

June 8, 2009
Brian Wesbury and Bob Stein of FIrst Trust Advisers offer some sunshine on the U.S. economy:
1) Since bottoming in February, consumer confidence has had the fastest three-month increase on record. 2) The ISM manufacturing index, which fell to historic lows over the winter, has climbed from its hole to signal that the overall economy is now expanding. 3) The Richmond Federal Reserve index, a measure of manufacturing in mid-Atlantic states, is showing growth. 4)  Container shipments both into and out of the ports of Los Angeles and Long Beach – key measures of international trade – have traced a V-shaped recovery. 5) In the financial markets, the yield on the 10-year Treasury note is back up to 3.86%, almost exactly where it was in August 2008, just before the crisis hit. 6) The VIX Index – a measure of stock market volatility and risk – has also traded back to levels not seen since August 2008. 7)  Meanwhile, key commodity prices, such as oil, copper, lumber, and gold are well off crisis-period lows.
Their bottom line:
In the last full calendar quarter before September (the second quarter of 2008), real GDP grew at almost a 3% annual rate. This is exactly what we expect for the third quarter of 2009 – 3% real GDP growth – with even faster economic growth in Q4 and then in 2010.

Should Obama get credit for ending the recession?

June 3, 2009

Mustard seeds (or green shoots, if your prefer) are appearing everywhere, from credit markets to manufacturing to housing. And of course the 40 percent surge in the U.S. stock market since mid-March is hard to miss.