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Monthly Archives: April 2014

The Big Bang Theory: Inflating the Stock Market

The popular theory that accelerating price inflation in the U.S. would eventually be detected has gone many years with little evidence.

It does not take a Ph.D. to see that we may be witnessing a big bang in inflation. The popular theory that accelerating price inflation in the U.S. would eventually be detected has gone many years with little evidence. However, signs that inflation has probably bottomed are now showing up everywhere.. The Consumer Price Index, the most commonly cited and used measure of inflation, averaged 1.4% over the past year, but rebounded from 1.1% in February to 1.5% in March…

Inflating the Stock Market

The Weakest Earnings Cycle in 55 Years

This has been the weakest earnings cycle in 55 years. Every earnings cycle

over the past 55 years has generated about a 7% annualized earnings per

share (EPS) growth rate, when measured from peak to peak or from trough

to trough. The best multi-year earnings cycle measured from prior peak

to the next peak was an annualized 9.1% and the worst 5.6%, with most

clustered tightly around the average of 7.3% This is notable given

the differing levels of inflation, interest rates, and economic growth that

companies had to adapt to in each cycle. However, the current cycle — while

not yet over — has been much weaker than the average, generating only a

2.8% annualized growth rate from the prior cycle peak in the second quarter

of 2007 through the first quarter of 2014.

The Weakest Earnings Cycle in 55 Years.

Jobs Looking for People Redux

As reported by the Bureau of Labor Statistics of the U.S. Department of Labor last Friday, April 4, 2014, the private sector economy added 192,000 net new jobs in March 2014, despite another round of unusually cold weather in most of the nation during the month. As of March 2014, 116.1 million people are employed in the private sector economy in the United States, a new all-time high. The prior peak for employment was at the onset of the 2007 – 09 Great Recession in January 2008, when the economy employed 116 million people. It took the economy 74 months to get back to the prior employment peak….

The Labor Market Hit a Milestone in March 2014, Finally Surpassing the Pre-Recession Peak on Employment….

Jobs Looking for People Redux

Labor Market Report Card

The unusually cold, snowy, and generally disruptive winter weather that gripped large portions of the United States in December 2013, January 2014, and February 2014, persisted into March 2014, but the severity waned a bit in March. While much colder-than-usual temperatures were present in six of the nine U.S. Census regions in early March, and several snowstorms hit the Midwest and eastern United States, fewer power outages and flight cancellations occurred nationwide than in a typical March — all of which suggests that weather will still be a factor in the March employment data, but not as big a factor as it was in the prior three months….

Labor Market Report Card