May 17, 2012

Jobless Claims (week ended 5/12/2012)

- Initial Claims 370,000 which was the same as the previous week only after the previous week was revised upward to 370,000

- 4-week Moving Average was 375,000

The good news is that the jobs market is not getting worse.  The bad news is that it is not getting any better except for the thinnest of margins.

Leading Economic Indicators (April 2012)

- Month/Month -0.1%

FOMC

FOMC minutes suggest the possibility of additional monetary easing but the real story is that there is absolutely nothing monetary policy can do faced with massively irresponsibility fiscal policy which, at present, calls for decreasing spending and increasing taxes at the end of this year.

Despite this, Treasury yields are falling because things are worse in the EU.

May 16, 2012

Mortgage Applications (week ended 5/11)

 
Purchase Index - Week/Week -2.4%
Refinance Index - Week/Week 13.0%
Composite Index - Week/Week 9.2%

Refinance application move up when rates move down but the purchase index indicates that the real estate market remains flat.

Housing Starts (April 2012)

Starts -  717,000 (seasonally adjusted, annualized)
Permits - 715,000 (seasonally adjusted, annualized)

We need about 1,500,000 starts to accommodate population growth. 

Industrial Production

Production - Month/Month 1.1%. Previous was revised from flat to down 0.6%
Capacity Utilization Rate - 79.2%

Growth may be slow but the manufacturing part of the economy is expanding.

http://mam.econoday.com/showimage.asp?imageid=22536

May 15, 2012

CPI (April 2012)

- CPI Month/Month +0.2% overall
- CPI Month/Month unchanged core

Well-contained inflation allows the Fed to keep its loose monetary policies in place.  Unfortunately, loose monetary policy is not creating the desired growth in GDP and jobs.

Retail Sales (April 2012)

Reportage of this bit of data reveals the clueless nature of media.

Retail Sales - Month/Month +0.1%
Retail Sales less autos - Month/Month +0.1%
Less Autos & Gas - Month/Month  +0.1%

Last month when the data for March was reported at +0.8% it was hailed as growth.  The problem is that Retail Sales is not adjusted for inflation.  Retail Sales for March and April indicate flat spending in terms of real (inflation adjusted) purchases and only show that we had a spike in gas prices in March. Take a look at the following which shows soft consumer spending.

ICSC-Goldman Store Sales (week ended 5/12)

Store Sales - Week/Week change -0.8%
Store Sales - Year/Year +4.5%

Redbook (week ended 5/12)

Store Sales Year/Year +3.7%

May 11, 2012

PPI (April 2012)

- PPI - Month/Month  -0.2%
- PPI - Year/Year  +1.9%
- Core PPI (less food & energy) - Month/Month +0.2%
- Core PPI (less food & energy) - Year/Year +2.8%

Lower oil prices brought down overall PPI and core is right about where the Fed wants.

This is a chart of year/Year core (bars) and overall (line)

http://mam.econoday.com/showimage.asp?imageid=22510

University of Michigan Consumer Sentiment (May 2012)

- Level 77.8.  Previous was 76.4.  Consumers say they are ready to spend.

May 10, 2012

Jobs (week ended 5/5/2012)

- New Claims 367,000
- Previous was revised from 365,000 to 368,000
- 4-Week Moving Average 379,000.

Bloomberg headlines this data as "U.S. Jobless Claims Decline, Allaying Concerns of Labor Setback."  Part of the problem is the unwillingness of media to accurately report data.  The jobs market is not good, it is just not as bad as it was last month.  The flat jobs market restrains GDP growth and has serious social costs.

http://mam.econoday.com/showimage.asp?imageid=22495

Import/Export Prices (April 2012)

Export Prices - Month/Month 0.4%
Export Prices - Year/Year 0.7%
Import Prices - Month/Month -0.5%
Import Prices - Year/Year 3.4%

The drop in imports prices is about oil.

http://mam.econoday.com/showimage.asp?imageid=22497

- Trade Balance deficit  $51.8 billion. Previous was $46.0 billion.

May 9, 2012

Mortgage Applications

 
Purchase Index - Week/Week +3.4%
Refinance Index - Week/Week +1.3%
Composite Index - Week/Week 1.7%

The gains in the purchase index do not offset the losses of the previous 4 weeks.

Wholesale Inventories

Inventories - Month/Month +0.3%

It is not fundamentals which are driving market but angst associated with EU debt.  The fact is that there never has been a real plan to deal with EU debt just a method of delaying any solution.  When the political calculus changes all assumptions are tossed and no one knows what will happen.

May 8, 2012

NFIB Small Business Optimism Index (April 2012)

- Level 94.5 up 2 points from last month and at the highest level of this year.  This is a survey which asks businesses 10 questions: plans to increase employment, plans to make capital outlays, plans to increase inventories, expect economy to improve, expect real sales higher, current inventory, current job opening, expected credit conditions, now a good time to expand, and earnings trend.

ICSC-Goldman Store Sales  (week ended 5/5/2012)

- Store Sales week/week -0.8%
- Store Sales year/year +3.3%

Redbook (week ended 5/5/2012)

- Store Sales year/year +2.6%.  Previous was +2.9%.

Treasury prices are up (yields down) today on renewed angst about Greece.

May 7, 20102

There are no fundamentals today.  When the U.S. Treasury market opened in Tokyo (Sunday evening Eastern time) Treasury prices were up sharply (yields down) presumable based on the uncertainty generated by the French Presidential election. The angst must have subsided because this morning Treasuries are tame here in the U.S.

May 4, 2012

Jobs

BLS Employment Situation Report (April 2012)

- Non-farm jobs were +115,000.  Previous was revised to +154,000 from +120,000

- Average Hourly Earnings was flat
- Average Workweek was flat.

The Unemployment Rate fell to 8.1% because there were 342,000 fewer people in the civilian labor force.  The labor participation percentage (size of the labor force/adult noninstitutionalized population) fell from 63.8% to 63.6%.  More attention should be paid to the participation ratio because it is the people working who drive GDP and pay taxes.  Cheering for a lower unemployment rate when the labor participation ratio is falling misses the point.

Another disappointing report.  There is no mystery.  The housing bubble was a borrowed money bubble and the recovery is taking much longer than a typical cyclical recession. 

May 3, 2012

Jobs

- Initial Jobless Claims 365,000.
- Previous was revised to 392,000 from 388,000
- 4-week Moving Average 383,500

Graph: http://mam.econoday.com/showimage.asp?imageid=22464

While better than last week this is still not indicative of anything more than modest recovery. 

When the BLS Employment Situation Report comes out tomorrow, attention will be focused on jobs added and on the unemployment rate but the most important piece of data is the labor participation rate and than has been falling.

Challenger Job-Cut Report

- Announced layoffs 40,559. Previous was 37,880.

This is a report of layoffs at large companies. 

Non-farm Worker Productivity and Costs (1stQ2012)

Non-farm productivity - Quarter/Quarter  -0.5%
Unit labor costs - Quarter/Quarter  +2.0%

No one has a good explanation as to why worker productivity (GDP/hour worked) has declined.  This should be a concern because increasing worker productivity is important to containing inflation.

ISM Non-Manufacturing Index (April 2012)

Still shows growth but declined from 56.0 to 53.5.  This is a survey index which had four components: business activity, new orders, employment, and supplier deliveries. Any reading above 50 indicates expansion.

Graph: http://mam.econoday.com/showimage.asp?imageid=22467

BLS Employment Situation Report is tomorrow.  I think that expectations are so low that only something under +100,000 will rally Treasuries.

May 2, 2012

ADP Jobs (April 2012)

- ADP private payroll employment +119,000.  Prior was 209,000 revised to 201,000.

BLS was weak last month and this is an indication that it could be weak again.

Graph: http://mam.econoday.com/showimage.asp?imageid=22454

MBA Mortgage Applications (week ended 4/27/2012)

Purchase Index - Week/Week +2.9%
Refinance Index - Week/Week -0.7%
Composite Index - Week/Week +0.1%

The housing market remains weak.  It will stay weak until more people are working.

Factory Orders (March 2012)

- Factory Orders Month/Month -1.5%.  This is the largest decline in three years.  Factory Orders have large swings from month to month and this simply another example of the supply side making up for the lack or prior demand on the consumer side.  With the consumer modestly increasing spending, the supply side will pick up again reacting to increased demand.

May 1, 2012

ISM Manufacturing (April 2012)

- ISM Index of Manufacturing sector - 54.8 up from previous 53.4

Mark this as good economic news after weeks of supply side weakness. 

http://mam.econoday.com/showimage.asp?imageid=22446

Construction Spending (March 2012)

- Construction Spending Month/Month +0.1%
- Construction Spending Month/Month +6.0%

Retail

ICSC-Goldman Store Sales (Week ended 4/28/2012)

- Store Sales week/week -0.3%
- Store Sales year/year +4.2%

Redbook (Week ended 4/28/2012)

- Store Sales year/year +2.9%

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