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Lighthouse Macro Report - 2013 - July

Lighthouse Macro Report - 2013 - July

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Published by Alexander Gloy
We calculate the likelihood of US recession by looking at about a dozen individual indicators. The likelihood is currently at 7%. Electricity consumption, gasoline deliveries, miles traveled and output by utilities are the only variables giving recession warnings.
We calculate the likelihood of US recession by looking at about a dozen individual indicators. The likelihood is currently at 7%. Electricity consumption, gasoline deliveries, miles traveled and output by utilities are the only variables giving recession warnings.

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Categories:Types, Business/Law
Published by: Alexander Gloy on Aug 14, 2013
Copyright:Attribution Non-commercial

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10/11/2013

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Lighthouse Investment Management
 
Macro Report - US economic indicators - July 2013 Page 1
Macro Report
Economic Indicators - USA - July 2013
 
 
Lighthouse Investment Management
 
Macro Report - US economic indicators - July 2013 Page 2
Contents
Summary ....................................................................................................................................................... 3Lighthouse Recession Probability Index........................................................................................................ 4Introduction .................................................................................................................................................. 5Fed Funds Rate ............................................................................................................................................ 10Crude Oil ..................................................................................................................................................... 11Construction: Building permits ................................................................................................................... 12Employment: Non-Farm Payrolls ................................................................................................................ 13Employment: Jobs Gained / Lost ................................................................................................................ 14Employment: Jobs Gained/Lost (zoomed-in) .............................................................................................. 15Employment: Hire and Fire ......................................................................................................................... 16Employment: Initial and Revised Non-Farm Payrolls .................................................................................. 17Employment: Full Time ............................................................................................................................... 18Employment: Part Time .............................................................................................................................. 19Employment: Full-Time to Part-Time Ratio ................................................................................................ 20Employment: Labor Force Participation Rate ............................................................................................. 21Consumer Sentiment: University of Michigan Survey ................................................................................ 22Consumer Confidence: Conference Board Survey ...................................................................................... 23Total Credit Outstanding ............................................................................................................................. 24Retail Sales: Nominal .................................................................................................................................. 25Retail Sales: Real ......................................................................................................................................... 26Retail Sales: Real per-capita ........................................................................................................................ 27Retail Sales Excluding Autos ........................................................................................................................ 28Manufacturing: Hours Worked ................................................................................................................... 29Manufacturing: Orders ............................................................................................................................... 30Orders: Capital Goods ................................................................................................................................. 31Manufacturing: Supplier Deliveries ............................................................................................................ 32Electricity Usage .......................................................................................................................................... 33Output: Electricity and Gas ......................................................................................................................... 34Transportation: Miles Traveled ................................................................................................................... 35Transportation: Gasoline Consumption ...................................................................................................... 36Inflation: Implicit Price Deflator .................................................................................................................. 37Inflation: Consumer Price Index .................................................................................................................. 38Inflation Expectations ................................................................................................................................. 39Inflation Expectations and Stock Market .................................................................................................... 40
 
 
Lighthouse Investment Management
 
Macro Report - US economic indicators - July 2013 Page 3
Summary
June 2013 highlights:
 
The likelihood of recession remained at 7%
 
Output by electric and gas utilities, industrial electricity consumption, miles traveled andgasoline supplied are the only variables showing recessionary tendencies
July 2013 trends:
 
Average monthly employment remained at 190k (prior: 189k) per month - just enough to keepthe unemployment rate from rising.
 
The unemployment rate would be significantly higher if it wasn't for a declining labor forceparticipation rate.
 
Retail sales growth accelerated a bit (to 5.4% excl. food), but slowing trend continues (+1.3%excl. autos over last 3 months annualized)
CONCLUSION:
The probability for recession is low. However, economic growth remains very weak. Realdisposable incomes are not growing, and consumption is slowing. The recent rise in 10-year yields (1.6%to 2.7%) and emerging market troubles (Brazil, China) could have negative consequences going forward.

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