Perspectives Blog

Labor markets in the new digital age

Columbia Management, Investment Team | April 14, 2014

…to craft solutions, but governments can play an important role initiating re-training programs and refocusing our educational priorities. In the past, technology and innovation mainly impacted goods producing industries like manufacturing, which saw with widespread job losses during recessions and mediocre gains during recoveries. However, the impacts are now broadening to include many industries that were never before regarded as technology int…

Quality milestone in the European recovery story

March 17, 2014

…mentum in the euro area, while a pick-up in business investment suggests that European corporates are reassessing the economic outlook. Purchasing Managers’ Index data for February also underlined the recovery in the European manufacturing sector. This latest bank lending data point, shown in Exhibit 1, indicated that things are finally starting to move in the real economy. Exhibit 1: European bank lending to the private sector finally turns posi…

Special report – 2014 mid-year review and outlook

Columbia Management, Investment Team | June 16, 2014

…ds still appear likely to pick up in the second half of 2014 to near 2.75%, as drags continue to unwind. Positives for the outlook include a reversal of the brake from fiscal contraction, further gains in capital spending and manufacturing activity, and a diminishing trade imbalance as U.S. exports are bolstered by energy. Housing represents a risk factor, particularly if interest rates shoot higher again, underscoring how sensitive growth is to…

Second quarter earnings preview

Tom West, Director of Equity Research | June 30, 2014

…vestors will be looking for confirmation that revenue growth is picking up given that estimates for 2014 are back half weighted (1H consensus revenue growth of +4% vs. 2H revenue growth of +6%). The new order component of ISM manufacturing would suggest that domestic activity picked up in the second quarter but management commentary will tell us if this is just catch-up from the weather induced weakness in the first quarter, or a sustainable pick…

A tale of two labor markets

Marie M. Schofield, CFA, Chief Economist and Senior Portfolio Manager | November 11, 2013

…crushed expectations, together with 60K upward revisions to prior months. Obviously there was a modest drag from government job cuts of 8K, all at the Federal level. However, gains in goods producing industries excelled with manufacturing (+19K), construction (+11K) and mining (+5K) all above trend. This is good news as these are higher wage industries. But the strongest gains were seen in the retail (+44K) and the leisure/hospitality (+53K) ind…

Rebalancing the U.S. economy

Marie M. Schofield, CFA, Chief Economist and Senior Portfolio Manager | January 13, 2014

…dividends. This capital deepening can begin to close the output gap and is probably what the markets are counting on. We are beginning to see some lift in private sector construction spending on offices, commercial space and manufacturing plants (see chart 2). Private sector construction Source: Census Bureau, November 2013   Consumers (70% of growth) appear a bit hamstrung. Spending has picked up slightly in the last six months, but the c…

U.S. rates — play for growth

Zach Pandl, Portfolio Manager and Strategist | December 10, 2013

…k. The three-month moving average continued to hover around 200k (193k this month), and the payroll diffusion indexes pointed to a broadening of gains. We were also encouraged to see a further acceleration in construction and manufacturing employment. It bears mentioning that even the large rebound in household employment leaves the three-month average gain at just +72k. The participation rate also failed to recover all of last month’s large decl…