Daily Archives: August 14, 2008 @ 11:19 am (Thursday)

2008-08-14 US Economic Releases

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Consumer Price Index MoM (Jul)

Survey 0.4%
Actual 0.8%
Prior 1.1%
Revised n/a

Out of control, but if the recent commodity sell off holds headline will moderate some for awhile. Lots of pass-throughs and cost push forces in place.

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CPI Ex Food & Energy MoM (Jul)

Survey 0.2%
Actual 0.3%
Prior 0.3%
Revised n/a

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Consumer Price Index YoY (Jul)

Survey 5.1%
Actual 5.6%
Prior 5.0%
Revised n/a

The Fed has to be concerned that the 2% FF rate is way too accommodative, especially with Q2 GDP no forecast at over 3% and Q3 looking like 2%.

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CPI Ex Food & Energy YoY (Jul)

Survey 2.4%
Actual 2.5%
Prior 2.4%
Revised n/a

Could be headed much higher as cost push pass-throughs starting to register.

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CPI Core Index SA (Jul)

Survey n/a
Actual 216.230
Prior 215.526
Revised n/a

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Consumer Price Index NSA (Jul)

Survey 219.075
Actual 219.964
Prior 218.815
Revised n/a

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CPI TABLE 1 (Jul)

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CPI TABLE 2 (Jul)

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CPI TABLE 3 (Jul)

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Initial Jobless Claims (Aug 9)

Survey 435K
Actual 450K
Prior 455K
Revised 460K

Up, but confused by new extended benefits.

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Continuing Jobless Claims (Aug 2)

Survey 3310K
Actual 3417K
Prior 3311K
Revised 3303K

Not looking good either, but how bad can it actually be with GDP north of 3%?

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Jobless Claims TABLE 1 (Aug 9)

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Jobless Claims TABLE 2 (Aug 9)


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Last week’s initial claims summary

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On Fri, Aug 8, 2008 at 2:47 PM, Cesar writes:

  • federal extension of benefits SHOULD have no DIRECT impact on initial claims like they did in 2002
  • in 2002 part of the law required people to make an initial claim in the state system to become eligible for federal benefits, but that is not the case in 2008. The way it should work now is that the state evaluates if you are eligible for the state program when you are applying for federal program. If you are eligible for the state program you make a claim with the state and that shows up in initial claims data. If you are not eligible for the state program you make a federal claim that is counted separately and is not part of the weekly initial claims data.
  • however, the millions of notification letters that have been sent out to people who are potentially eligible for the federal program could have yielded some folks that show-up to get federal benefits, but learn they have state benefits they must exhaust first (anyone getting state benefits first would show up in initial claims)- this is a potential source for an INDIRECT “distortion” of initial claims
  • i saw Ohio had some of the highest claims data last week so i called up to learn how applications were being handled. On both calls i made they said they would file an initial claim with the state program first to make sure i was not eligible, then apply for the federal program. Applying for the state program would show up as an initial claim even if i was later rejected (interesting to note that for the last twelve months before 3/31/2008 less than 50% of people who made “initial claim” actually got first payment). If Ohio and possibly other states are actually filing an initial claim in the state system that gets counted in the weekly data in order to determine eligibility for all people applying for the federal program this would lead to a much larger distortion.


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2008-08-13 JN News Highlights

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Highlights:

Economy Shrinks Annualized 2.4% On Weak Domestic Demand

 
 
Articles:

Economy Shrinks Annualized 2.4% On Weak Domestic Demand

(Nikkei) Declining consumer and capital spending contributed to pushing down Japan’s gross domestic product 0.6% in real terms from the previous quarter during the April-June period, for an annualized rate of minus 2.4%, according to preliminary data released Wednesday by the Cabinet Office.

The first contraction in four quarters was also attributed to a drop-off in exports amid the U.S. economic slowdown.

Domestic demand contracted 0.6%, with personal spending shrinking 0.5% as price hikes for a number of daily necessities dampened consumer sentiment. The weaker demand also reflected the fact that the previous quarter had one more day than in normal years because 2008 is a leap year.

Capital spending declined 0.2%, while housing investment slid 3.4%. Overall domestic demand pushed down GDP growth by 0.6 percentage point.

Exports, which had until recently driven economic growth, fell 2.3%, meaning overseas demand failed to push up GDP growth in the three months ended June.

In nominal terms, GDP contracted 0.7% for an annualized rate of minus 2.7%.

Fails to mention it grew at over 3% in the prior quarter, so the two quarter average is marginally positive. Japan data seems to have more noise than US data.

Also note the nominal measure over the last year:

Nominal GDP Q/Q:

Q2/08 -0.7%
Q1/08 +0.2%

Q4/07 -0.1%
Q3/07 flat

 
 
Lots of noise due to ‘inflation’ as they measure it.

Yes, a soft quarterly report, but as expected or slightly better than expected on most counts.

Same twin themes as the US: weakness and higher prices.

And lots of talk about a fiscal program over there.


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2008-08-13 UK News Highlights

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Highlights:

BoE Cuts Growth Forecasts, Jobless Climbs
U.K. Unemployment Rose the Most Since 1992 in July
Surge in credit card debt charge-offs
U.K. Homebuilders Fall as Unemployment Rise May Worsen Slump

 
 
Article snip:

BoE Cuts Growth Forecasts, Jobless Climbs (Bloomberg) The BoE cut its forecast for U.K. economic growth and held out the prospect of lower interest rates as unemployment rose the most in almost 16 years in July. Governor Mervyn King said the inflation rate will fall below the 2 % target in two years if policy makers keep the benchmark interest rate at 5 %.

But not if they cut is the implication as well.


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2008-08-13 China News Highlights

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They know how to keep it all going:

(Bloomberg) “Demand for investment is still the one to depend on for dealing with potential external shocks,” because local consumption is not enough to be the main engine of China’s growth, said the center, affiliated with the National Development and Reform Commission. “All levels of government should prepare a list of investment projects in urban transport and infrastructure so that they can be launched immediately once needed.”


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