6 Feb 2012 by Jim Fickett.

On Friday Eurostat reported retail trade data through December. Although the broader European union doesn't look too bad, the euro zone shows a clear declining trend. The debt crisis is likely to have a negative impact on the economy for a while yet.

(Data and graph courtesy of Eurostat; click for larger image.)

4 Feb 2012 by Jim Fickett.

Earlier this week Mebane Faber at World Beta published an interesting study comparing Shiller's CAPE for several countries (Australia, Canada, France, Japan, Germany, Italy, Korea, Switzerland, UK, USA). Recall the CAPE (Cyclically Adjusted Price Earnings) measures overall stock market valuation as the ratio of current price to the average of the last 10 years of inflation-adjusted earnings. Canada and Italy have the lowest current valuations (and the US has the highest). Italy, of course, is in a bit of a mess right now, but the Canadian economy is quite healthy, suggesting that perhaps Canada is a good place to look for bargains.

If you look at the detailed graphs on World Beta, note that the time axis is different for different countries. Bear in mind that stock market valuations have tended to be higher in the last few decades, in the era of central bank stimulus policies.

3 Feb 2012 by Jim Fickett.

Backing off to look at the big picture, it is clear that

• the medium-term trend is probably for job growth slightly faster than that of population
• we are not going to really catch up on lost jobs (i.e. come back up the the dashed line in the figure below)

What is going on? I have pointed out before (On the value and limitations of the "stall speed" concept) that in the last few recoveries there has been a post-bounce deceleration, looking almost like a mini-recession. I think that's what we've just finished, and we are now in the mini-bounce following that. So yes, this is a pretty positive employment report, at least in light of the last few years. And it does add weight to my view that the US is pretty likely to avoid a near-term recession, provided Europe does not crash. But it does not change the medium-term outlook of sluggish growth and slow recovery.

3 Feb 2012 by Jim Fickett.

Even I think today's employment report is somewhat encouraging. The year-over-year change in the number of jobs is up to 1.5%:

However both the main data and leading indicators still suggest the growth rate may level off, and a continuing slow recovery is still the most likely outlook.

3 Feb 2012 by Jim Fickett.

Both the unemployment rate and initial unemployment claims are slowly dropping:

But whereas claims are finally looking like they may come below the high rates of 2001-3, U3 (the main unemployment rate), U6 (the broad unemployment rate) and the number of those working part time though they would prefer full time all remain very high.

All in all, the unemployment picture is indeed slowly improving, but hardly looks like a bang-up recovery.

2 Feb 2012 by Jim Fickett.

US natural gas in storage, measured relative to demand, is at low levels and continues a long decline:

(For sources see US natural gas supply.)

2 Feb 2012 by Jim Fickett.

A robotics lab at University of Pennsylvania is working on swarms of hovering drones that cooperate:

From a technology viewpoint, that's pretty fun and impressive.

When you combine such technological advances with the current administration's claiming the right to assassinate American citizens without trial (even without providing any public justification) it gets a little scary. (The ACLU is suing, hopefully to at least force Obama to provide a public, legal basis for the assassination program.)