Ray Hendon’s Economics Blog

Many journalists, when writing about the economy, focus on the broadest pictures:  Gross National Product, total Non-farm employment, etc.  But, sometimes the big picture needs supplementing with a narrower focus. 
In looking at employment, for example, it helps to break the total employment picture down into three primary sectors.

Cyclical Services, which include information services, fire, professional [...]

Deflation is real and a serious problem. But, we know how to break out of the downward spiral it can bring about. Monetary policy is used to control price inflation and deflation. Fiscal policy is used to stimulate aggregate demand. Deflation won’t last, so enjoy the lower prices while you can.

A report from Hong Kong states that the yuan is set to fall for about the next six months.  The Chinese monetary authorities have signaled they will allow the fall by small amounts in order to make Chinese exports more attractive to foreigners.  The China economy is heavily dependent on exports, and a strong yuan [...]

The bursting of the real estate bubble is no longer news.  We can watch it unfold before our very eyes, as if we were watching some distant star explode a billion light years away.  The three pictures shown below show a snap shot of the real estate explosion and subsequent implosion.
The first chart shows Washington [...]

The American economy lost 533,000 jobs in November, the most in 34 years.  The unemployment rate shot up to 6.7 percent, the highest in 15 years.  The last time that job losses in a single month were this bad or worse was in December, 1974.
The chart below provides a picture of how the recession has [...]

Speaking at the Clinton Global Initiative conference in Hong Kong, the chairman of China’s sovereign wealth fund , Mr. Lou Jiwei, said on Wednesday that China had no plans for further investments in Western financial institutions. “Right now we do not have the courage to invest in financial institutions because we do not know what [...]

There is no good news today for the world’s economy, including America. In the United States, the monthly survey of business by The Institute for Supply Management showed that manufacturing activity fell to 36.2 from October’s 38.9. A figure below 50 indicates the sector is contracting. The Associated Press reports: “The November reading is the [...]