Archive for April, 2008
Wednesday, April 16th, 2008
The US Bureau of Labor Statistics released March Consumer Price Index (CPI) data today, showing that inflation continues to be an issue for the US economy. Overall, prices increased 0.3% in March vs. February and 4% over the last twelve months.
Don’t be fooled by the so-called “core” inflation number which shows inflation of 0.2% and 2.4% respectively. The core number excludes food and energy items; two components which have seen the highest price growth and impact consumers the most. Inflation is a killer for economies, as higher prices weigh on corporate earnings and reduce the present value of future real cash flows.
More Housing Pain
Housing data out today also showed more of the same, as housing starts fell about 12% in March vs. February. March housing starts are also 37% lower than they were in March 2007. Good times.
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Tuesday, April 8th, 2008
It’s no secret that international growth (especially in markets such as China and India) has been driving global energy demand. Per the Economist, worldwide energy consumption will grow about 3.5% by the end of 2008, and oil prices are expected to remain relatively high.
However, emerging markets such as Brazil are also playing a pivotal role on the supply side as well. With the recent discovery of the Tupi and Jupiter fields off the coast of Rio de Janeiro, Brazil could find itself among some of the largest holders of oil reserves in the world. The location of these reserves (deep water) is beneficial for leading oil services companies such as Noble Corp. (NYSE: NE). (more…)
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Friday, April 4th, 2008
The Bureau of Labor Statistics announced unemployment jumped to 5.1% in March this morning, confirming investor fears that the US is in the throes of a recession. Per the data, non-farm payrolls fell by 80,000 in March, led by further declines in manufacturing, construction, and employment services.
Bad News Gets Worse
Of particular note is a decline of 35,000 jobs in professional and business services. This is unsettling for Wall Street, as these jobs had remained resistant to the declining job market until now.
Related Links:
US Dept of Labor
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Thursday, April 3rd, 2008
Jobless claims announced this morning grew to 407,000 (week-end 3/29) vs. the consensus estimate of 365,000 and prior period claims of 366,000. The markets already show signs of weakness on the heels of the news, as investors typically put significant weight on employment data when evaluating the health of the economy.
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