More PMI Suspicion

by Jeffrey P. Snider
Alhambra Partners

It is easy to make jokes about the BEA’s newfound respect for “residual seasonality” that in the words of CNBC’s chief economist makes each Q1 appear to be a “different economy altogether”, but that doesn’t mean there isn’t something to it if in a far different manner than the mainstream would ever contemplate. There clearly is and has been for at least the past two or even three years a confusing set of circumstances that have repeated. Each year starts out very slowly only to seemingly rebound, but with each rebound being far more “transitory” than the actual weakness that preceded it. The result is almost a ratchet effect, where the media and economists over-emphasize each bounce that “somehow” leads only to the next bout of weakness at an even lower condition.

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