4thQ2015 GDP Weak at +0.7%.

GDP (4thQ2015 1st estimate)

– Real GDP quarter/quarter, seasonally adjusted, annualized  +0.7%. Previous was +2.0%
– GDP price index quarter/quarter, seasonally adjusted, annualized  +0.8% . Previous was +1.3%

This is weak but was expected to be weak.  I believe that people will start to recognize that 1) government policy be it fiscal or monetary has done almost nothing to get GDP going.  2) the world economy is slowing and that is affecting the U.S. negatively especially by decreasing exports 3) we are stuck probably for an extended period (another 5-10 years at least) with accepting that 2% GDP growth is the best we can do.

An enemy at present is debt.  2% GDP growth will not generate revenue necessary to  keep the deficit from increasing.  The inability to achieve fiscal sustainability will lead to extremely serious problems in the future.

A complete analysis of GDP by Rick Davis of Consumer Metrics Institute will be available at http://www.loanmine.com/CustomPage156.x

 
Goods Trade Deficit (November 2015)

– Deficit $61.5 billion.  Previous was $60.3 billion
– Goods Exports -1.0%.  Previous was -1.6%
– Goods Imports +0.0%.  Previous was -1.9%.

The is the sum of a lot of moving parts:  lower oil prices, a stronger US $ and a weakening of the Chinese economy which is probably worse than the suspicious official data. While the

effects here in the U.S. are relatively minor the effects on oil producing nations are enormous.  These are the countries in the middle-east, Africa , South America and even Canada. Lower oil prices have the potential to destabilize governments and societies.

 
Employment Cost Index  (4thQ2015)

– ECI quarter/quarter  +0.6%. Previous was +0.6%
– ECI year/year   +2.0%. Previous was  +2.0%

The fact is that we have been more or less stuck at +2.0% since 1stQ2010.

The concern is that inflation in wages, unlike inflation in goods tends to be sticky.  Oil can fall 70% in price is a year.  Wages never suffer large falls.

 
Chicago PMI (January 2016)

– Business Barometer Index  55.6. Previous was  42.9.

This is a regional survey index.  The index moved from contracting (less than 50) to expanding (greater than 50).

 
Consumer Sentiment (January 2016)

– Sentiment 92.0. Previous was 93.0.

This is the University of Michigan Consumer Sentiment Index.  It is supposed to be a leading indicator of Consumer Spending.