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February 24, 2014Coffee Reaches 16-Month High as Sugar Gains on Brazil DroughtPrices rallied 59 percent this year, the best performer in the Standard & Poor’s GSCI Spot Index of 24 commodities. But what can wake the sleeping giant?Click to enlarge.The chart shows the 10 year moving average of the Chicago Fed National Activity Index.A zero value for the index indicates that the national economy is expanding at its...

This is an update to a post I did several years ago.September 23, 2011An Employment Trend that Has Not FailedI promised an exponential trend that has not failed. Here it comes!We can get this ratio to infinity simply by continuing to shed manufacturing jobs faster than we shed financial activities jobs. It might not be as easy as it looks though.In hindsight, it has not been easy.The following chart shows the natural...

The following chart compares the growth in the number of retail production and nonsupervisory employees (in black) to the growth in the aggregate weekly hours worked by retail production and nonsupervisory employees (in blue).Click to enlarge.We have "successfully" transitioned to a "weaker than appears" retail employment economy. Get out the party hats.See Also:Sarcasm DisclaimerSource Data:St. Louis Fed: Custom C...

The following chart shows real nonfinancial corporate business credit market liabilities per capita (September 2013 dollars).Click to enlarge.An exponential trend channel did not fit the data well at all but a parabolic trend sure did.Parabolic moves are not sustainable over the long-term. This is a mathematical certainty. About the only thing open for debate here is the timing of the failure(s).There's a reason that...

The following chart shows the annual growth in the S&P 500 Index divided by the annual growth in retail sales (excluding food services). I offer two data sets. One starts at 2004:Q1 (in black) and the other starts at 2010:Q2 (in blue). A parabolic trend line has been added for each series.Click to enlarge.Note that both parabolic trends are nearly identical. So much for the "fool me once shame on you, fool me twice...

The following chart shows industrial capacity per capita (industrial production index adjusted for capacity utilization and population).Click to enlarge.That's a 0.998 correlation over 27 years of data (Jan 1967 to Jan 1994). And then... Boom! Trend broken big time. That has to be one of the most impressive trend failures I've ever posted on this blog. It was so incredibly consistent and predictable right up until it...

The following chart shows real GDP.Click to enlarge.Four exponential trend lines and their growth rates have been added.Note that each time an exponential trend fails, it is replaced with an exponential trend of lesser quality. What doesn't kill us, doesn't make us stronger. Go figure.The next chart shows the long-term trend of those growth rates. I'm using the midpoint of my hand-picked expansions as the x-axis.Click...

Click to enlarge.The line in black shows real net corporate dividends.The line in blue shows the real trade deficit (same scale).The red line shows the exponential trend in real dividends from 1947:Q1 to 1987:Q1. Note the exponential trend failure (to the upside).Will real dividends stay permanently elevated? Will profit margins stay permanently elevated? Can we be assured that the worst is behind us? Can we expect...