Consumer Prices Have Gained 1.5 Percent Year-Over-Year
The Labor Department via the Bureau of Labor Statistics said Tuesday the Consumer Price Index (CPI) rose 0.2% for February, meeting the consensus forecast. Over the last 12 months (year-over-year), the CPI rose 1.5% before seasonal adjustment.
The consensus forecast was looking for that 0.2% gain, ranging from a low of 0.0% to a high of 0.4%.
The food index gained 0.4%, its largest monthly increase since May 2014. Both the food at home and food away from home indexes also rose.
The gasoline index gained 1.5% in February, following three straight months of declines, pushing the energy index up 0.4% against declines in the electricity and natural gas indexes.
The so-called core CPI, or all items less food and energy, rose 0.1% in February after gaining 0.2% in January. The shelter index, as well as the indexes for personal care, apparel, and education all rose.
The indexes for recreation, medical care, used cars and trucks, and new vehicles all fell.
The all items index rose 1.5% for the 12 months ending February juxtaposed to 1.6% for the 12-months ending January. The index for all items less food and energy rose 2.1% over the last 12 months, a slightly smaller figure than the 2.2% gain for the period ending January.
The food index rose 2.0% over the past year, its largest 12-month increase since the period ending April 2015. In contrast, the energy index declined 5.0% over the last 12 months.
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The NFIB Small Business Optimism Index edged 0.5 higher to 101.7, slightly below the consensus forecast. Plans for capital outlays notably improved, as did views about future and current business conditions as a good time to expand.
The consensus forecast was 102.5, with forecasts ranging from a low of 101.8 to a high of 103.8.
“Small business owners are thankful to have the government shutdown in the rearview mirror but need more certainty about the future,” said NFIB President and CEO Juanita D. Duggan. “Small businesses put their money where their expectations are as we’ve seen when they get tax and regulatory relief.”
The Uncertainty Index fell marginally by 1 point to 85, indicative of residual uncertainty from the partial government shutdown.
“The best thing Washington can do for the small business half of the economy is to continue the policies – tax cuts and deregulation – that leave them with more resources to invest and find qualified workers.”
The February’s NFIB Jobs Report found job creation among small businesses broke the 45-year record in February with a net addition of 0.52 workers per firm. Fifty-seven percent (57%) of owners reported hiring and trying to hire, with 49% of those owners reporting few or no qualified applicants for open positions.
The previous record was in May 1998 at 0.51 workers per firm. However, the skills gap continues to be a top challenge for employers.
“Owners still want to grow and expect they could sell more if they could hire employees to produce more,” said NFIB Chief Economist Bill Dunkelberg. “Small businesses want to expand in this growing economy but only if they can find qualified applicants for their open positions.”
“On the positive side, now that the government is funded, owners should be getting back to business with the rebound in consumer sentiment.”
Small business owners who expect business conditions to improve rose 5 points, while those viewing the current period as a good time to expand gained 2 points. Twenty-seven percent (27%) plan capital outlays in the next few months, up 1 point.
Forty-one percent (41%) of those reporting weaker profits blamed sales, 22% cited lower selling prices, and 9% blamed labor costs. According to the Labor Department, labor productivity and costs rose 1.9% and 2.0%, respectively, in the fourth quarter of 2018.
Plans to invest were most frequent in wholesale trades (43%), manufacturing (39%), construction (32%), and agriculture (31%).
Dow Jones Industrial Average (^DJI) Also Gained +200.64, or +0.8%
After the first week of across-the-board declines in 2019, stocks rallied sharply as both the S&P and Nasdaq eclipsed their month-to-date declines for March.
As we begin the second full week of the month. the S&P 500 (^SPX) rose +40.23, or +1.5% to 2783.30, while the NASDAQ Composite (^IXIC) gained +149.92, or +2.0% to 7558.06.
Meanwhile, the Dow Jones Industrial Average (^DJI) rose +200.64, or +0.8% 25,650.88, trailing other Major Market Averages. The underperformance was entirely attributable to Boeing Co (BA), which was -$22.53, or -5.3% to ~$400.01. This translated to ~-170 points on the DJI.
While the cause of the Ethiopian Airlines crash is yet to be determined, it did not have a “guilt by association” spillover effect into the Aerospace or Airline stock universe.
The Dow Jones Transportation Average (^DJT) rallied nearly +2%; +196.06 to 10312.92. This broke a losing streak of a 11 days for the DJT, allegedly the longest losing streak in a few decades, although I’ve seen conflicting details.
While long by duration, the extent was muted by many fractional, daily declines while the 2 largest were between -0.75% and -1.0%. During the 11 session losing streak the DJT lost -4.8% of its value from 10632.50 to 10116.86.
On Monday, it regained +1.9% in a single session.
Market internals were a clear sign of encouragement for investors as advancing issues led decliners by nearly 4 to 1 and Up Volume was 5x Down Volume.
The January Retail Sales report; +0.9 ex-autos and +1.1% from Core Retail Sales, was another positive data point on the economy. It reinforces what investors have seen of late from Housing, Jobs, Earnings, Productivity, and Business Investment, following the aberrant declines in December and early January.
We will get additional input on the economy this week, including reports on business optimism, durable goods, construction spending, industrial production and consumer sentiment.
New Polling Backs Conservative Argument for No Deal Brexit
Quick Background Before Key Findings in Latest Opinion Polling on Brexit
In June 2016, the British people voted 52 percent to 48 percent in a shocking upset to leave the European Union (EU). The vote split the then-dominant Conservative Party and led to the resignation of former Prime Minister David Cameron.
He was replaced by “Reluctant Remainer” Theresa May, who served the EU divorce papers on March 29, 2017, when she triggered Article 50, giving her new government until March 29, 2019, to agree on a deal.
Emboldened by her strong, unearned new political position, Prime Minister May called for snap elections. It was one of the worst political miscalculations in modern politics.
The Labour Party saw its biggest vote share gain since 1945 and won 262 seats. It was a good night for the now disheveled opposition. But it becoming increasingly clear the result was not an affirmation, but rather a rebuke of the government’s failure to negotiate Brexit.
On January 15, Prime Minister May’s initial agreement was soundly defeated after a tumultuous process leading up to its drafting. Late January, MPs took a series of key votes meant to signal the beginning of the end to the impasse.
Sir Graham Brady, the influential head of the Conservative Party’s 1922 Committee, proposed to overcome the hurdle by replacing the Irish backstop, arguing it would give Prime Minister May “enormous firepower” when demanding concessions from Brussels.
The Brady Amendment was approved 317 to 301 in mid- February.
On Sunday, it was reported 74 senior Tory activists, to include more than 50 association chairman, told Prime Minister May that Conservative voters “do not fear a no deal exit” and “just want Brexit delivered.”
As Conservatives push the prime minister harder, with a report even suggesting she was told she may have to resign, new polling is supporting their argument.
ComRes Key Findings on Brexit
ComRes, a member of the British Polling Council, interviewed 2,042 adults online in Great Britain March 4 – 5. The updated survey found more British voters support a No Deal Brexit, and majorities–often big majorities–side with Leave on major concerns and issues.
The Leave Campaign won the vote, and appear to have won the argument. First, it’s important to note that only 37% in the survey sample supported Leave in 2016, while 34% voted to Remain and 24% did not vote.
It’s also important to note that Leave–at least in this survey–would find itself in a less favorable position than in 2016. However, the British still want the results respected, including 55% who agree they don’t care how.
Q7: A plurality, 46%, would vote to Remain if the referendum was held again, while 39% would vote to Leave the EU. Excluding undecideds and those who refused to answer, Remain garners 50% to 42% for Leave.
Nevertheless, let’s take a look at more Brexit-specific findings from the survey, which is viewable in its totality below.
Q12: More than 6 in 10 (63%) say after Brexit the UK should position itself as the lowest tax, most business-friendly nation in Europe, while 37% do not agree.
Q12a: Nearly 6 in 10 (56%) disagreed people who argue Britain could become a free-trading, self-governing powerhouse are “living in a fantasy.” Only 44% thought Leave supporters are living in a fantasy.
Q12b: Nearly 6 in 10 (56%) said the results of the 2016 EU Referendum should be respected AND do NOT want a second held, while 44% would be willing to hold one.
Q12c: More than 6 in 10 (64%) agree with the argument the EU has treated the UK unfairly, exploiting divisions within Westminster, while only 36% believe the EU has treated Britain fairly.
Q12d: Recently, seven MPs quit the Labour Party, citing big money influence, rising anti-Semitism on the left and Brexit. More than 7 in 10 (73%) said MPs who change parties should be required to resign, and fight for re-election.
Q13a: Nearly 7 in 10 (69%) agree Jeremy Corbyn’s commitment to support a second EU Referendum isn’t genuine because he was forced into it, while 31% believed it was.
Q13b: A majority (55%) says the Labour Party is now nastier than the Conservative Party, while 45% disagree.
Q13c: More than 6 in 10 (64%) think MPs who favor Remain but represent constituencies who support Leave should not stand in the way. Only 36% disagree.
Q13d: 6 in 10 (60%) said the 2016 EU Referendum should be respected irrespective of how they voted. Only 40% said the impact to trust in the social contract is secondary to leaving the EU under No Deal Brexit.
Q13e: 6 in 10 (60%) also believe civil disobedience is more likely if Brexit is not respected than if it is.
Q14: More than three-quarters (76%) agree the British Government handled the negotiations over Brexit badly. That said, only 20% believe Jeremy Corbyn would’ve handled them the negotiations better than Theresa May, compared to 54% who disagreed.
Q14 Expanded: A majority (55%) agreed with the statement, “I don’t really care how we do it, I just want Brexit to be sorted” compared to 33% who didn’t.
Q14 Expanded: When asked, “If the EU refuses to make any more concessions, the UK should leave without a deal,” 44% agreed juxtaposed to only 30% who did not. That represents a 6-point gain for No Deal Brexit, with a sizable number (25%) of unsure voters presenting themselves as target rich.
ComRes interviewed 2,042 GB adults online between 4th and 5th March 2019. Data were weighted to be demographically representative of all GB adults by age, gender, region and social grade. Voting intention questions were also weighted by past vote recall and likelihood to vote and all other questions also weighted by 2016 EU Referendum results. ComRes is a member of the British Polling Council and abides by its rules.
Retail Sales Up 2.3% Year-Over-Year, 2.6% Over Same Period One Year Ago
The advance estimate for U.S. retail sales in January came in at $504.4 billion, an increase of 0.2% from December and 2.3% from January 2018. The consensus forecast was 0.1%, ranging from a low of -0.4% to a high of 0.5%.
Total sales for the November 2018 through January 2019 period were up 2.6% from the same period a year ago. The November 2018 to December 2018 percent change was revised from down 1.2% to down 1.6%.
Retail trade sales were up 0.2% from December 2018, and 1.9% above last year. Building material and garden equipment and supplies dealers were up 8.7% from January 2018, while non-store retailers were up 7.3% from last year.
“The key takeaway from the report is that core retail sales–which exclude auto, gasoline station, building materials, and food services and drinking places–increased a solid 1.1%,” Tim Anderson, analyst at TJM Investments said.
“That factors into the goods component for personal consumption expenditures, so it will likely prompt some upgrades to Q1 GDP forecasts.”
Last month, U.S. retail sales were largely misreported. While they fell 1.2% in December for the biggest monthly decline of the expansion since September 2009, they were still up 2.3% from December 2017.
Retail sales have rebounded sharply over the last two years, after experts forecasted the demise of the sector. The prior holiday shopping season began early, along with Thanksgiving, and big months for October and November skewed the monthly percentage change.
On this episode of Liberty Never Sleeps, Tom goes into a full-throated rant about how the clowns in our society have become the ringmasters.
*Jaguar 1, Idiot 0 *Manafort and Clinton *Fox and DNC Debates *Dependency, PR and Food Stamps *Buttgeig and Pence
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The U.S. economy continues to hum along at levels not seen since the Great Recession, though you’d never know it listening to Big Media. The data from the economic calendar–all of which we cover at People’s Pundit Daily (PPD)–is fundamentally strong.
Clearly, some of the post-2016 optimism waned if only temporarily as a result of what we are calling Coverage-Induced Chicken Little Syndrome.
Looking at the totality of the data, there’s more than a solid argument to make that coverage bordering on hysteria has repeatedly hurt confidence and sentiment.
Lets recap gross domestic product, consumer-related indicators, as well as data on both the housing market and labor market.
Gross Domestic Product (GDP)
The Bureau of Economic Analysis (BEA) late last month said GDP for the fourth quarter (Q4) 2018 came in at a solid 2.6%, beating the consensus forecast.
Real GDP increased by 2.9% in 2018 when measured from the 2017 annual level to the 2018 annual level. From Q4 2017 to Q4 2018, real GDP rose 3.1%, up from 2.5% in 2017. GDP for Q3 2018 was revised to a strong 3.4%.
Guess which measurement the media chose to focus on?
Consumer Sentiment, Confidence and Spending
Consumer confidence bounced back big time in February, rising 9.7 points from an already elevated reading of 121.7 in January to 131.4 (1985=100), crushing the consensus forecast.
This solid gain followed what was a temporary decline in January resulting from “temporary shock,” or fear-mongering during the partial government shutdown.
This is not just speculation. The hard data backs the soft derived from the monthly indicators on consumer sentiment and confidence.
The personal savings rating–which declined steadily from 7.0 in January 2018 to 6.1 in November 2018–shot up to 7.6 in December. American consumers were scared into lowering spending habits even as gains in personal income (1.0%) more than tripled the consensus (0.3%).
Now the fear has subsided, Consumer Comfort surged over the past two weeks to a new high for this cycle and the highest since the 2000 bubble.
Labor Market
The headline nonfarm payrolls increase of 20,000 in the February jobs report was a big miss from the consensus. That said, there were strong positives in the report that were completely ignored.
First, the unemployment rate fell 0.2% to 3.8%, including a new low for Hispanic Americans, and it wasn’t driven by labor force exits.
In Q4 2018, workers’ wages saw the largest gain since Q3 2008, marking the first time in more than a decade wages and salaries broke 3%. Labor force participation, which held firm in February, is now at the highest level since 2013.
The much-disparaged report showed average hourly earnings rose by 3.4% year-over-year, and have now risen by 3% or more for 7 consecutive months. That’s real upward wage pressure.
Big positive revisions were made to December and January. For December, the total jobs created was revised higher from +222,000 to +227,000, and January was revised up from +304,000 to +311,000.
Given the significant discrepancy between the ADP National Employment Report, it wouldn’t at all be surprising to see big revisions to the government report in March, along with a solid number for that month.
The payroll processor said earlier this weekU.S. private sector employment increased by 183,000 jobs in February, beating out the consensus forecast. For January, the total number of jobs added was revised up 87,000 from 213,000 to 300,000.
We also learned that labor productivity rose 1.9% to beat the consensus, and jobless claims have improved from a temporary increase to levels still indicating a very tight labor market.
Jobless claims fell 3,000 to a seasonally adjusted 223,000 for the week ending March 2, slightly less than the consensus forecast. The 4-week moving average came in at 226,250, a decrease of 3,000.
The advance seasonally adjusted insured unemployment rate fell 0.1% back to a low of 1.2% for the week ending February 23. The advance number for seasonally adjusted insured unemployment during the week ending February 23 was 1,755,000, a decrease of 50,000.
Under the previous administration, the Small Business Optimism Index repeatedly found job creators citing the tax and regulatory environment to as the number one challenge to hiring.
Now, it’s the skills gap, a story the media has missed at our peril since just after the passage and signing of the Tax Cuts and Jobs Act (TCJA).
Housing Market
While media chose to focus on lagging existing home sales, more recent data began to back up the big boost we saw in builder confidence for February.
The forward-looking Pending Home Sales Index (PHSI) rose 4.7% in January. The new residential construction report found housing starts and building permits both bounced back to beat their consensus forecasts.
Homeownership is now at the highest level since 2014 and the mortgage delinquency rate is at an 18-year low.
New home sales gained 3.7% to 621,000 units in December after a big surge in November, easily beating the consensus. The target forecast was looking for 590,000 units, ranging from a low of 550,000 to a high of 649,000.
Not only are buyers looking and finding, but sellers are getting their price. The median home price rose 5.0% to $318,600.
What’s Next?
Millions of working Americans have never experienced a real era of economic prosperity nor the potential for one. But it is wholly possible they will be robbed of one if we continue spreading Coverage-Induced Chicken Little Syndrome.
There is more critical economic data due before the end of the quarter, including retail sales for February and the CPI-PPI combo due out this week.
The final reading for Q4 GDP, coupled with corporate profits, will be released before the end of the month on March 28.
House Democrats struggled this week to bring a resolution “rejecting anti-Semitism” to the floor, a measure responding to controversial remarks by Rep. Ilhan Omar, D-Minn., about Israel.
Rep. Omar and Rep. Rashida Tlaib, D-Mich., became the first Muslim women sworn into Congress in January. That was just over 60 days ago, and to date both have either made or posted comments critics have called anti-Semitic.
Only three weeks ago, House Speaker Nancy Pelosi, D-Calif., and her top lieutenants publicly condemned Rep. Omar’s previous remarks as anti-Semitic.
At a press conference on Thursday, Speaker Pelosi caved to pressure from the growing dissent among the leftwing base, claiming Rep. Omar wasn’t “intentionally anti-Semitic” and didn’t understand the “full weight,” or meaning of her words.
She revealed she had not asked Rep. Omar to apologize, nor would she. The watered-down version of the resolution–which even a Jewish Republican member voted against–didn’t mention her specifically.
The freshmen lawmaker will not be relieved of her assignment on the powerful House Foreign Affairs Committee, as requested by eleven Jewish groups in a letter sent to Speaker Pelosi and Rep. Eliot Engel, D-N.Y, who chairs the committee,
What happened? What changed since Speaker Pelosi and her top lieutenants characterized her remarks as “anti-Semitic tropes and prejudicial accusations” that were “deeply offensive”?
On Wednesday, Speaker Pelosi walked out of a meeting with Democratic House members, who were in full revolt over the resolution condemning anti-Semitism. They felt emboldened by activists and anti-Israeli lobby supporting them on the Hill.
That same day, Rep. Tlaib hosted a meeting with activists who either have ties to or have voiced support for Hamas and other Islamic supremacist groups. Linda Sarsour and representatives of CAIR, the Council on American-Islamic Relations, attended the meeting.
While CAIR bills itself and is portrayed as a Muslim civil rights and advocacy group, it was founded by two members of the Muslim Brotherhood’s now-defunct “Palestine Committee”.
The Palestine Committee was created by the Brotherhood to advance Hamas’ political and financial agenda in the United States.
Nihad Awad, who was also present for the meeting in Tlaib’s office, is one of those former committee members, and he currently serves as executive director for CAIR. According to federal investigators, he was a close associate of Hamas leader Moussa abu Marzook.
Asra Nomani–an author, journalist and Muslim reformer–walked into the halls of Congress to be present for the meeting. She was belittled, physically blocked and taunted by several representatives of CAIR.
“As a Muslim woman who has witnessed and experienced abuse by Muslim men, it is terrifying to be spoken to with the hate, hostility and aggression Arab/Islamist men openly throw at Reform women,” Shireen Qudosi, the Clarion Project’s National Correspondent wrote of the incident.
“As Nomani points out, this is America not some Arab country — but the way we’re treated, you can’t tell the difference.”
Mongi Dhaouadi, who can be seen in the video attempting to physically intimidate Nomani, served as the executive director for CAIR in Connecticut. The group has removed that information from the staff section of their website.
Dhaouadi supported Tunisia’s pro-Islamic Ennahda party, which according to the Brookings Institute, has a “grey” record on their “commitment to pluralism, and respect for women’s and minority rights.”
On September 24, Tunisian President Beji Caid Essebsi ended a four-year alliance between his secular party, Nidaa Tounes, and the Islamist party Ennahda.
Sarsour, a co-chair of the national Women’s March and a campaign surrogate for politicians including Bernie Sanders and Alexandria Ocasio-Cortez, has a long and documented history of making anti-Semitic remarks.
In the above video, she can be scene directing Jinan Shbat, also known as Jinan Deena, to block Nomani. Jinan, the events and outreach manager for CAIR, has posted a number of anti-Israel comments to social media dating back years.
In May, 2018, journalist and commentator Wajahat Ali announced on social media the Islamic Society of North America, or ISNA, had disinvited him from speaking at their annual convention in Houston.
The U.S. government named ISNA as a member organization of the Muslim Brotherhood in the case against the Holy Land Foundation for Relief and Development.
Altaf Husain, ISNA vice president, cited his “recent work” with Israel for the disinvite, which included filming a documentary with The Atlantic that spoke with Jewish settlers and Palestinians in the West Bank.
In 2014, he also participated in the Muslim Leadership Initiative, or MLI, as part of the Shalom Hartman Institute, a program that “invites North American Muslims to explore how Jews understand Judaism, Israel, and Jewish peoplehood.”
Rabia Chaudry, an attorney and author who also participated in MLI, was disinvited as well for engaging directly with Israeli Jews. Chaudry tweeted a story from The Washington Examiner covering the disinvite, which elicited this response from Jinan.
MAY 31 2018: “You both deserve it. Your work on Israel is abhorrent. The fact that you can’t separate Zionism from Judaism is laughable. To be anti-Israel is not anti-Semetic [sic]. Being pro-Israel is actually more Christian than Jewish. Supporting Israel has no space in the Muslim world.”
A month later, she attacked them again on Twitter in a tweet referencing Razan Al-Najir, a young Muslim paramedic killed by IDF gunfire in Gaza back in 2018.
JUNE 1 2018: “Shame on Wajahat and Rabia and all other Muslim and Arab sympathizers of Israel. Fuck you and your normalization. When Israel kills, you are complicit. Razan’s blood is on your hands. Enjoy your Ramadan, bastards.”
Western media initially portrayed Razan as a symbol of the Israeli aggression against unarmed Palestinian protesters in Gaza. They overlooked Razan admitting to Arab media she was in Gaza to willingly use herself as a human shield for Hamas.
“I am Razan Al-Najir,” she told the interviewer before her death, which the terror group celebrated as martyrdom. “I am here on the frontlines to act as a human shield.”
Hamas frequently uses paramedics and other medical personnel as human shields.
Maajid Nawaz, a former Islamic extremist turned-activist against extremism, tweeted a political cartoon depicting the human shield tactic before an appearance in London.
CAIR has repeatedly been equivocal on their support for Hamas, claiming to not support any organization that engages in violence, though are careful not to mention the terror group by name.
In Jinan’s response, she states Hamas “are the only ones fighting for Palestinians from within Palestine,” adding anyone who doesn’t agree needs “to just f*** off.”
JUNE 10 2018: “Let’s free the people from your pro-Zionist rhetoric.
If people can’t understand by now that Hamas was created mid-80s as a resistance to Israel, that they are the only ones fighting for Palestinians from within Palestine (screw the PA), then you all need to just f*** off.”
The “PA” is a reference to the Palestinian Authority led by Mahmoud Abbas. Once political adversaries of Hamas, the Palestinian Authority has become increasingly radical.
Following the passage of the rewritten resolution, which was watered down to the point even Rep. Omar voted for it, Sarsour took a victory lap on Twitter, posting “they tried to divide us but we won.”
According to the Center for Responsive Politics, CAIR contributed directly to just two congressional candidates, with Rep. Omar being the top recipient.
The Baker Hughes Rig Count for North America fell 33 rigs from 1249 to 1216 for the week ending March 8, 2019.
The U.S. rig count fell 11 to 1027, though still up 57 rigs from a year prior.
Rigs classified as drilling for oil fell by 9 rigs to 834, though are still 38 rigs higher than a year ago. Rigs classified as drilling for natural gas fell by 2 to 193, 5 rigs above one year ago.
The Canadian rig count fell 22 to 189, which is 84 lower than one year ago.
Rigs classified as drilling for oil fell by 22 rigs to 118, down 78 from a year ago. Those classified as drilling for natural gas fell by 2 to 193, which is 6 rigs lower than last year.
The Gulf of Mexico, while a subset of the U.S., is a separately counted component. It held steady at 22, up 9 rigs from one year ago.
The Baker Hughes Rig Count tracks weekly changes in the number of active rigs classified as drilling for either oil or gas. Active rigs are essential for the exploration and development of oil and gas fields.
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