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Apr 16 2021

How Much Inflation Is Too Much? It’s A Moving Target

  • Apr 16, 2021

In the latest Green Book, we noted that Producer Price Inflation does not usually become a challenge for the stock market until its annual rate breaks above 4.0%. The day that comment was published, the year-over-year gain in the March PPI for Finished Goods spiked to 6.0%, thanks mostly to the well-celebrated COVID-19 anniversary-effect. 

Jul 07 2020

The Second Wave: No One Seems To Care!

  • Jul 7, 2020

While investors cheer the stock market on to challenge its all-time high, new COVID-19 cases are also making daily records in the U.S. The first wave of the pandemic helped to tank the S&P 500 by nearly 30% in the course of three weeks, while the second wave, now in development, has yet to deter the raging bulls.  

Jun 05 2020

A Long Boom, And The Ultimate Bust

  • Jun 5, 2020

Last December, we marveled at the disconnect between the (surging) S&P 500 and the (sagging) Boom/Bust Indicator. Just six months later, we can only scratch our heads at what the hell we were complaining about.

Nov 07 2019

Labor Cost Observations

  • Nov 7, 2019

We take a look at different data sets reflecting labor costs. The main finding is that using Unit Labor Cost as the measurement for the true cost suggests that the labor market is very tight in terms of affordability for businesses.

Jul 04 2019

Slowdown Or Recession? Confidence Is Key

  • Jul 4, 2019

The pattern of sharp sell-offs followed by equally sharp rallies continued in June. Most risky assets recouped nearly all the losses suffered in May, and then some.

Jun 07 2019

Bust To Boom, And Back Again

  • Jun 7, 2019

Last month, we observed that crude oil was the only item propping up broad-based commodity indexes, and that something was bound to give with the U.S. dollar pushing to new highs.

Mar 07 2019

Unemployment And The Point Of No Return

  • Mar 7, 2019

We’ve done extensive work on the yield curve, but until now had entirely overlooked an employment-based recession indicator that’s lately come into focus.

Mar 01 2019

Assessing The Cyclical Risks

  • Mar 1, 2019

With all the excitement over the Fed’s shift in rhetoric and the excellent subsequent market action, there’s a danger of losing sight of the broader cyclical backdrop for U.S. stocks. Remember, the economy is still operating beyond government estimates of its full-employment potential, and it’s not as if the Fed has actually eased policy—as it did successfully at a similar late-cycle juncture in the fall of 1998 and (ultimately unsuccessfully) in the summer of 2007.

Nov 07 2018

Too Soon To Expect Economic Weakness?

  • Nov 7, 2018

We believe stocks have begun to discount a major inflection point in the economy and corporate profits for 2019 and 2020.

Aug 07 2018

Assessing The Correction

  • Aug 7, 2018

How do today’s cyclical conditions stack up with those accompanying other stock market declines? 

Jul 07 2018

Inflation Warning Flags?

  • Jul 7, 2018

After yet another benign figure on wages for June, the idea that inflationary pressures might be a problem for the stock market seems far-fetched.

Jun 15 2018

Full Employment And Rising Prices Aren’t Stock-Friendly

  • Jun 15, 2018

Annual Producer Price Inflation rose to 4.0% in May, a key threshold above which the S&P 500 has historically delivered essentially flat returns. But the fact that this reading occurs against a backdrop of full employment is cause for even more concern. Context is key...

May 05 2018

The Gap Is Back!

  • May 5, 2018

We celebrated the official closure of the GDP Output Gap in December, but that milestone was revised away in April by the statisticians at the CBO through a downward adjustment to the estimated rate of “full employment.”

Dec 07 2017

The “Gap” Is Gone. Now What?

  • Dec 7, 2017

In Q3, the CBO’s Nominal Output Gap swung to positive for the first time since the last business cycle peak. This type of move has historically meant the cyclical peak in profit margins is close at hand.

Nov 10 2017

Tax Reform Or Not, The Budget Is Already Busted

  • Nov 10, 2017

In 2010 and 2011, we were sometimes chastised for not paying more attention to exploding federal  deficits, which at the time were running between 8% to 10% of GDP. We argued that a substantial share of these budget shortfalls was cyclical in nature, and would eventually be reversed by an improving economy.

Nov 07 2017

Two Curves, One Theme

  • Nov 7, 2017

Our data shows the traditional Phillips Curve relationship between the unemployment rate and wage inflation still holds.

Sep 08 2017

Don’t Look Now, But...

  • Sep 8, 2017

We recognize it’s uncultured to discuss federal debt and deficits during a multi-year bull market, but in economics and investing it frequently pays to worry when others don’t, and to stop worrying when others do.

Nov 05 2016

A New Take On The Labor Market

  • Nov 5, 2016

Politicians bemoan the lack of “good-paying jobs,” but what’s the current perspective of employers? According to a simple measure developed by economist Edward Renshaw many decades ago, employers see a lack of “unused labor capacity” in the U.S. that should lead to yet another year of disappointing GDP growth in 2017.

Feb 05 2016

How Much Slack?

  • Feb 5, 2016

By now it’s consensus that the Fed missed the ideal window for the first rate hike (if one ever existed) by at least a year and a half. We don’t disagree…

Jul 08 2015

Navigating The First Rate Hike

  • Jul 8, 2015

Our current view is the lift-off will be December or later. Assuming inflation will pick up and the Fed hikes the rate by the end of 2015, stocks will perform relatively well, with international stocks a better bet than U.S. stocks.

Jan 08 2014

The Economy In 2014: Solid But Unspectacular

  • Jan 8, 2014

This year should be a solid but unspectacular one for the U.S. economy, with real GDP growth of about +2.5%. We expect the Consumer Price Index to rise just 1.5%. Unemployment should continue to fall.

Jun 06 2013

Global Yield Curve Confirms “Muddle Through” View

  • Jun 6, 2013

The global yield curve is in a sideways range bound pattern, indicating anemic demand for credit. An examination of developed and emerging countries confirms our “muddle through” view.

Jul 05 2011

“Just Another” Soft Patch

  • Jul 5, 2011

MTI studies of market values, investor psychology and price action have (so far) overwhelmed the economic “elephants in the room.” A few thoughts on those elephants.


Dec 04 2010

Deciphering The Real Message In The Employment Figures

  • Dec 4, 2010

It’s a big mistake to react to the headline reports of employment, and an even bigger mistake to make investment decisions based on them.

Dec 02 2008

Update On Non-Farm Payrolls....Buy Signal Likely With November Data

  • Dec 2, 2008

Non-farm payroll data is poised to register a buy signal for the stock market in early December. Using the year over year rate of change has historically been very effective in identifying recession-related market bottoms.


Apr 05 2008

Employment Data Continues To Deteriorate

  • Apr 5, 2008

At the risk of beating the “we’re in a recession” theme into the ground, we thought some analysis of the hot-off-the-presses March employment data would be worthwhile.

Mar 05 2008

Jobs/Consumer Data Flashing Recessionary Signals

  • Mar 5, 2008

Optimists have continuously cited low unemployment and the ever resilient U.S. consumer as two “pillars of strength” that will help keep the economy afloat. It has become considerably more difficult to make this case in recent months, as jobs and spending data have weakened to levels associated with recessions.


Oct 03 2007

Consumer Watch– Economic Data Weakening, Consumer Stocks Already Discounting A Slowdown

  • Oct 3, 2007

Our view that the consumer is due for a pullback has been bolstered in recent months, as Consumer Discretionary groups have continued to slip in our Group Selection (GS) Score rankings.

Sep 05 2006

The Demise Of The Consumer

  • Sep 5, 2006

“Of Special Interest” section examines the likely demise of consumer spending power. Taking a lead from the GS Scores and other economic data, we believe that a significant underweight in areas that are particularly sensitive to consumer spending is a prudent strategy for now.

Aug 03 2005

The Consumer: Still Chugging Along

  • Aug 3, 2005

Consumer spending may have finally peaked in this cycle, but a consumer collapse is far from imminent. Consumers can be expected to remain supportive of economic growth.

Oct 05 2004

Assessing The Unemployment Statistics

  • Oct 5, 2004

The BLS’ Household and Payrolls surveys have been hopelessly out of sync for much of the current economic recovery, leading to debate about which statistic should be believed.

Sep 05 2004

Still Can't Count Out The Consumer

  • Sep 5, 2004

American consumer spending is still in an uptrend, helping to drive economic growth, although to a lesser extent. In the meantime, CapEx spending has been accelerating, which should serve to pick up any economic slack.

Apr 05 2004

A Big Picture View of the Jobs Data

  • Apr 5, 2004

Recent job data re-enforces our belief the economy is rebounding nicely. Expect to see job picture continue to strengthen in coming months.

Oct 05 2003

Don't Count Out The Consumer

  • Oct 5, 2003

Consumer should not be underestimated. Combined mortgage debt and household debt only 14%, just barely above the 1980-to-date median.

Feb 05 2002

A Disappointing Start

  • Feb 5, 2002

The “seasonals” were with us, but have yet to produce positive results. “V” shaped economic recovery conviction stronger than a month ago.