Out Fox The $treet

Jobless claims continue to drop towards the mid 300K level. A number generally consistent with solid jobs growth, but not near the lows of 300K in the mid 2000s. Mark Perry has a great chart showing the jobless claims as a percentage of the civilian workforce. The jobless claims number provides the absolute number of how many looking for a job, but it does a poor job of relating the relative change of the number over time. As the workforce increases over the decades, the absolute total of jobless claims will rise adjusting what should be considered normal claims levels. Unfortunately the market doesn't accurately grasp these changes. Most economics and analysts on tv still subscribe to the numbers from the '80s and '90s when the labor force was much smaller. Seeking Alpha article from Mark : From the chart, it is much clearer that the unemployment situation is actually better than in the '70s and '80s. Only the lows in the '00s provided a sustained l...

Great info from Mark Perry at the Carpe Diem blog . A must read blog for economic data. As Mark points out, corporate profits have not only recovered from the Great Recession in 2008, but they've now soared way beyond the 2007 peak. This chart over laid by the SP500 performance should be standard review in any finance class. Profits peaked back around 1998, but the stock market soared into 2000. On the contrast, profits continue to soar heading to nearly double that of 1998 levels yet the market is still struggling to obtain a faction of the stock prices in 2000. This should undoubtedly prove to any investor that the market is based solely on future profit potential and momentum. Never pay attention to anybody discussing the trailing PE. Utterly useless! Every corporate indicator alone would suggest a booming stock market reaching record highs, but the market struggles some 25% below the 2000 and 2007 peaks. It should also be a warning to those down on the market currently. W...

Mark Perry's Carpe Diem blog had a great little post on the recession predictive ability of the Treasury Spread. The New York Fed has a great chart that I've used in the past that predicts the possibility of a recession over the next year based on the treasury spread between the 10 year bond rate and the 3 month bill rate. As the chart shows, the possibility of a recession is below 1%. It just doesn't seem to happen when the treasury spread is this large. The market is increasing worried about a recession even though it just isn't likely under the current monetary circumstances. Clearly when an economy hits a soft patch as it did during April and May, the slant of the yield curve is hugely important in determining the next move whether up or down. With such a positive curve at over 3%, corporations and investors are encouraged to take on risks and in essence buy the dips. While a negative sloping yield curve causes the reduction in borrowing and business expansion...

Amazing that while most people fretted about a double dip during the summer, World Industrial Production hit an all time high eclipsing the record high from back in 2008. Clearly people focusing on a double dip are stuck on the lackluster US Housing market and not the global economy. Mark Perry provided this graph via the Netherlands Bureau for Economic Policy Analysis. Mark does a great job pointing out the facts surrounding global growth and this is yet another example of how economic data and graphs so much more useful then the talking heads on TV. Show me the facts not the spin!