Ace economist David Rosenberg of Canadian wealth managers Gluskin Sheff + Associates, colorfully opines (sorry, no links) on the March report from the U.S. National Federation of Independent Businesses:
The NFIB survey fell 1.8 points in March to 86.8 - all the way back to the pre-green shoot days of April/09. The lowest this metric ever got in the 2001-02 tech-wreck recession was 96.3; in the 1990-91 recession it hit a trough of 91.4; and in the 1981-82 recession it got as low as 94.4.
And today it sits at 86.8 which is below the worst points of the each of the past three recessions. Talk about a new paradigm when it comes to recoveries - ostensibly they can occur with two-thirds of the economy otherwise known as the small-business sector in complete disarray.
Capex and employment plans both receded by a point and the job openings subindex was down 2 points. Sales fell 3 points and earnings fell 4 points. And the credit conditions measure fell 2 points as well. On the inflation side, for every company raising their prices, three are cutting. A broadly-based decline but don't expect this to make the front pages as much as the ISM did.Sheesh. The Ceridian-UCLA Pulse of Commerce Index, based on fuel purchases by long-haul truckers getting their goods to market, showed a report today that is better:
The new PCI data also suggests that the economic growth in the first quarter was stronger than the consensus GDP forecast of 2.9 percent. Based on the PCI alone, expected GDP growth for the first quarter of 2010 is 4 percent, putting the economic indicator at the high end of forecasts (fewer than 10 percent of forecasters see GDP growth at 4 percent or greater). The PCI also suggests Industrial Production will grow at a healthy 0.5 percent when the Federal Reserve releases that number on April 15.But it's not good enough:
"The good news in March is that the economy is still recovering at a pace that should support job growth, although unfortunately not at a pace that will drive rapid improvement in the unemployment rate. GDP needs to grow at a 5 to 6 percent rate to drive meaningful change in unemployment," said Ed Leamer, chief economist for the PCI.
... "In other words, we fell into the recession much more rapidly than we are climbing out of it," Leamer said.Last, I didn't like what I heard from my neighbor Larry, who owns a high-end greeting card, gift and tchatchke store on Third Avenue, in the 20s, in Manhattan, the center of the universe. While walking the dogs the other morning he said his business was terrible, that he had seen none of the upturn suggested in the report last week of splashy U.S. retail sales. He owes the bank more than he ever has before and can't sleep at night.
"My customers have switched from an after-work spending hour to happy hour. Instead of coming to buy things from me, they are going to a bar, having a drink and texting," he said.I didn't press him on how he knew this.
But his report is corroborated by the sudden closing of two restaurants a couple of blocks from his store, and another upscale restaurant on 14th Street. I live in pretty fancy neighborhood, and a lot of the established places are just now going out of business. Where's the upturn for the little guy?