Weekly Indicators: Payroll Tax Withholding Falls Off A Cliff Edition

Credit conditions (from the Chicago Fed) 

  • Financial Conditions Index up +0.06 -0.82
  • Adjusted Index (removing background economic conditions) up +.08 to 0.61
  • Leverage subindex up +.03 to -0.54

The Chicago Fed's Adjusted Index's real break-even point is roughly -0.25.  In the leverage index, a negative number is good, a positive poor. The historical breakeven point has been -0.5 for the unadjusted Index. All three metrics presently show looseness and so are positives for the economy.

Trade weighted US$

  • Up +2.51 to 118.36 w/w -5.8% YoY (last week) (broad) (116.74 -128.62) 
  • Down -1.24 to 89.11 w/w, -11.69% YoY (yesterday) (major currencies) 

 The US$ appreciated about 20% between mid-2014 and mid-2015.  It went mainly sideways afterward until briefly spiking higher after the US presidential election. It has been a positive since last summer.

Commodity prices


  • Up +0.18 to 112.08 w/w
  • Up +3.12 YoY 

BBG Industrial metals ETF 

  • 140.10 up +7.99 w/w, up +17.80% YoY (108.00 - 140.10)

Commodity prices bottomed near the end of 2015. After briefly turning negative, metals also surged higher after the 2016 presidential election.  ECRI has decelerated enough to become neutral.  On the other hand, industrial metals made a new one year high this week.

Stock prices S&P 500

  • Up +4.3% w/w to 2732.22

Despite the 10% correction last week, stock prices did not make a new 3 month low and so remain positive, They made a string of new all-time highs beginning in summer 2016.

Regional Fed New Orders Indexes

(*indicates report this week)

  • *Empire State up +1.6 to +13.5
  • *Philly up +14.4 to +24.5
  • Richmond unchanged at +16
  • Kansas City up +7 to +14
  • *Dallas down -4.6 to +25.5
  • Month over month rolling average: up +3 to +18

The regional average has been more volatile than the ISM manufacturing index, but has accurately forecast its month over month direction, and remains positive, but less so than the last few months.

Employment metrics

 Initial jobless claims

  • 230,000 up +9,000
  • 4 week average 228,500 down -6,000 (new 40 year low)

 Initial claims remain well within the range of a normal economic expansion. The YoY% change in these metrics has been decelerating but is still a positive as well. 

The American Staffing Association Index

  • Up +2 to 94 w/w
  • Up +0.6% YoY

This index was generally neutral from May through December 2016, and then positive with a few exceptions all during 2017. It was negative for over a month, but has returned to being positive this week.

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This post is not an offer to buy or sell this security. It is also not specific investment advice for a recommendation for any specific person.


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Harry Goldstein 1 year ago Member's comment

Good stuff, anything more current by you?