by Calculated Risk on 9/08/2015 09:18:00 AM

From the National Federation of Independent Business (NFIB): NFIB Small Business Optimism Index increased only 0.5 points last month

The Index of Small Business Optimism went nowhere in August, so the good news is it did not fall. Two Index components, job openings and earnings trends both posted a solid 4 point gain, but there was not much action in the remaining components ...

On balance, owners added a net 0.13 workers per firm in recent months, better than July’s 0.05 but historically a solid reading.
emphasis added

Click on graph for larger image.

This graph shows the small business optimism index since 1986.

The index increased to 95.9 in August from 95.4 in July.

by Calculated Risk on 9/07/2015 08:15:00 PM

Weekend:
• Schedule for Week of September 6, 2015

Tuesday:
• At 9:00 AM ET, the NFIB Small Business Optimism Index for August.

• At 10:00 AM, the Fed will release the monthly Labor Market Conditions Index (LMCI).

• At 3:00 PM, Consumer Credit for July from the Federal Reserve. The consensus is for an increase of $18 billion in credit.

From CNBC: Pre-Market Data and Bloomberg futures: currently S&P futures are up 20 and DOW futures are up 150 (fair value).

Oil prices were down over the last week with WTI futures at $44.61 per barrel and Brent at $47.63 per barrel.  A year ago, WTI was at $97, and Brent was at $100 - so prices are down over 50% year-over-year.

Here is a graph from Gasbuddy.com for nationwide gasoline prices. Nationally prices are at $2.39 per gallon (down more than $1.00 per gallon from a year ago).  Gasoline prices will probably continue to decline over the next month (follow oil prices down).

by Calculated Risk on 9/07/2015 11:06:00 AM

An update: Last year, I posted some demographic data for the U.S., see: Census Bureau: Largest 5-year Population Cohort is now the "20 to 24" Age Group, Decline in the Labor Force Participation Rate: Mostly Demographics and Long Term Trends, and The Future's so Bright ...

I pointed out that "even without the financial crisis we would have expected some slowdown in growth this decade (just based on demographics). The good news is that will change soon."

Changes in demographics are an important determinant of economic growth, and although most people focus on the aging of the "baby boomer" generation, the movement of younger cohorts into the prime working age is another key story in coming years. Here is a graph of the prime working age population (this is population, not the labor force) from 1948 through August 2015.

Click on graph for larger image.

There was a huge surge in the prime working age population in the '70s, '80s and '90s - and the prime age population has been mostly flat recently (even declined a little).

The prime working age labor force grew even quicker than the population in the '70s and '80s due to the increase in participation of women. In fact, the prime working age labor force was increasing 3%+ per year in the '80s!

So when we compare economic growth to the '70s, '80, or 90's we have to remember this difference in demographics (the '60s saw solid economic growth as near-prime age groups increased sharply).

See: Demographics and GDP: 2% is the new 4%

The prime working age population peaked in 2007, and appears to have bottomed at the end of 2012.  The good news is the prime working age group has started to grow again, and is now growing at 0.5% per year - and this should boost economic activity.

Demographics are now improving in the U.S.!

by Calculated Risk on 9/06/2015 11:43:00 AM

Last year, in 2014, the BLS initially reported job gains in August at 142,000. Douglas Holtz-Eakin wrote "Disaster!". I couldn't help myself and made fun of Holtz-Eakin.

Not only wasn't the initial August 2014 report a "disaster", but it has since been revised up to 213,000.  And 2014 was the best year for employment gains since the '90s.  Some "disaster"!

Here is a table of revisions for August since 2005.  Note that most of the revisions have been up.   This doesn't mean that the August 2015 revision will be up, but it does seem likely.   I'm not sure why the BLS has underestimated job growth in August (possibly because of the timing of end of the summer job changes).

Overall I think the August employment report was decent and indicates further improvement in the labor market.

August Employment Report (000s)
Year	Initial	Revised	Revision
2005	169	196	27
2006	128	185	57
2007	-4	-17	-13
2008	-84	-259	-175
2009	-216	-217	-1
2010	-54	-39	15
2011	0	128	128
2012	96	188	92
2013	169	256	87
2014	142	213	71
2015	173	---	---

Note: In 2008, the BLS significantly under reported jobs losses. That wasn't surprising since the initial models the BLS used missed turning points (something I wrote about in 2007). The BLS has since improved this model.

by Calculated Risk on 9/05/2015 08:11:00 AM

This will be light week for economic data.

----- Monday, September 7th -----
All US markets will be closed in observance of the Labor Day holiday.

----- Tuesday, September 8th -----
9:00 AM ET: NFIB Small Business Optimism Index for August.

10:00 AM ET: The Fed will release the monthly Labor Market Conditions Index (LMCI).

3:00 PM: Consumer Credit for July from the Federal Reserve. The consensus is for an increase of $18 billion in credit.

----- Wednesday, September 9th -----
7:00 AM: The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.

10:00 AM: Job Openings and Labor Turnover Survey for July from the BLS.

This graph shows job openings (yellow line), hires (purple), Layoff, Discharges and other (red column), and Quits (light blue column) from the JOLTS.

Jobs openings decreased in June to 5.249 million from 5.357 million in May.

The number of job openings (yellow) were up 11% year-over-year, and Quits were up 1% year-over-year.

10:00 AM: The Q2 Quarterly Services Report from the Census Bureau.

----- Thursday, September 10th -----
8:30 AM: The initial weekly unemployment claims report will be released.  The consensus is for 275 thousand initial claims, down from 282 thousand the previous week.

10:00 AM: Monthly Wholesale Trade: Sales and Inventories for July. The consensus is for a 0.3% increase in inventories.

----- Friday, September 11th -----
8:30 AM ET: The Producer Price Index for August from the BLS. The consensus is for a 0.2% decrease in prices, and a 0.1% increase in core PPI.

10:00 AM: University of Michigan's Consumer sentiment index (preliminary for September). The consensus is for a reading of 91.0, down from 91.9 in August.

2:00 PM ET: The Monthly Treasury Budget Statement for August.