2008-04-16 US Economic Releases

Posted on April 16, 2008 @ 10:35 am (Wednesday) by WARREN MOSLER

MBA Mortgage Applications
Bloomberg Global Confidence
Consumer Price Index
Housing Starts
Building Permits
Industrial Production
Capacity Utilization

MBAVPRCH Index (Apr 11)

Survey	n/a
Actual	381.6
Prior	384.7
Revised	n/a

Holding in its new, lower range.

MBAVREFI Index (Apr 11)

Survey	n/a
Actual	2866.0
Prior	2724.7
Revised	n/a

Doing ok in this prime time for resets, which are peaking and then falling off.

Bloomberg Global Confidence (Apr)

Survey	n/a
Actual	14.54
Prior	13.08
Revised	n/a

Still down, but signs of a bottom.

In my humble opinion, inflation is ripping, and the Fed’s in a very bad place. April’s food and energy price hikes, along with hosts of others, and the weaker USD all are pointing to an upward surge for prices on a forward looking basis.The Fed’s forecasting models should be showing higher inflation as well.And futures markets continue to be an unreliable forecasting tool for the Fed.

Consumer Price Index MoM (Mar)

Survey	0.3%
Actual	0.3%
Prior	0.0%
Revised	n/a

CPI Ex Food & Energy MoM (Mar)

Survey	0.2%
Actual	0.2%
Prior	0.0%
Revised	n/a

Consumer Price Index YoY (Mar)

Survey	4.0%
Actual	4.0%
Prior	4.0%
Revised	n/a

CPI Ex Food & Energy YoY (Mar)

Survey	2.4%
Actual	2.4%
Prior	2.3%
Revised	n/a

From Karim:

Headline/Core divergence->limited passthrough

Headline 0.343% and stays at 4% y/y

Core rises 0.152% (after 0.04% last month), showing limited pass-through from headline and even more limited pass-through from wholesale level (PPI from yday).

Core rises from 2.3% to 2.4%, equates to about 1.9-2.0% on core PCE basis due to measurement differences

Food up 0.2% and gas up 1.3%

OER up 0.2%, apparel down 1.3%, vehicles down 0.1%

Lodging away from home down 0.6% and medical up only 0.1%, a bit below trend

Housing starts not looking good. The glimmer of hope is that prior months have been revised up for the last two reports, so there’s a chance this number could be revised substantially as well.

Housing Starts (Mar)

Survey	1010K
Actual	947K
Prior	1065K
Revised	1075K

Building Permits (Mar)

Survey	970K
Actual	927K
Prior	978K
Revised	984K

From Karim:

Housing data shows drag continuing with at least the same intensity

Starts down 11.9%, boding poorly for current GDP

Permits down 5.8%, boding poorly for future GDP

Best news is not adding to inventories

Industrial Production (Mar)

Survey	-0.1%
Actual	0.3%
Prior	-0.5%
Revised	-0.7%

May be due to exports, which are keeping GDP and employment muddling through

Capacity Utilization (Mar)

Survey	80.3%
Actual	80.5%
Prior	80.9%
Revised	80.3%

Staying too high for the typical recession.

2008-04-15 US Economic Releases

Posted on April 15, 2008 @ 8:46 am (Tuesday) by WARREN MOSLER

Producer Price Index
Empire Manufacturing
NAHB Housing Market Index
ABC Consumer Confidence

Producer Price Index MoM (Mar)

Survey	0.6%
Actual	1.1%
Prior	0.3%
Revised	n/a

PPI Ex Food & Energy MoM (Mar)

Survey	0.2%
Actual	0.2%
Prior	0.5%
Revised	n/a

Producer Price Index YoY (Mar)

Survey	6.2%
Actual	6.9%
Prior	6.4%
Revised	n/a

PPI Ex Food & Energy YoY (Mar)

Survey	2.8%
Actual	2.7%
Prior	2.4%
Revised	n/a

Producer Price Index TABLE

Inflation ripping.

From Karim:

Headline/Core divergence continues

Headline up 1.1% m/m and 6.9% y/y

Core up 0.2% m/m and 2.7% y/y

Food (+1.2%) and gas (+1.3%) lead the way up, computers (-3.2%) and passenger cars (-0.2%) lead the way down.

Intermediate and crude pressures remain intense, rising 2.3% and 8.0% respectively for the month

Further margin squeeze likely to put further downward pressure on capex, especially in light of weak economy and credit conditions (see below)

Empire jumps from -22.2 to 0.6. Index quite volatile and 10-20 point moves per month the norm as of late.

6mth expectations deteriorate from 25.8 to 19.6.

Shipments show largest jump from -5 to +17 (for current conditions)

Employment and average workweek both extremely weak

Capex intentions fall from 18 to 11.5

Empire Manufacturing (Apr)

Survey	-17.0
Actual	0.6
Prior	-22.2
Revised	n/a

Survey is colored by subjective recessions fears bouncing back some.

NAHB Housing Market Index (Apr)

Survey	20
Actual	20
Prior	20
Revised	n/a

Still looks to me like a bottom.

ABC Consumer Confidence (Apr 13)

Survey	n/a
Actual	-39
Prior	-34
Revised	n/a

Still looking weak. Much like an export economy

2008-04-14 US Economic Releases

Posted on April 14, 2008 @ 8:38 am (Monday) by WARREN MOSLER

Advance Retail Sales (Mar)

Survey	0.0%
Actual	0.2%
Prior	-0.6%
Revised	-0.4%

Retail Sales Less Autos (Mar)

Survey	0.1%
Actual	0.1%
Prior	-0.2%
Revised	-0.1%

Retail Sales YoY

Survey	n/a
Actual	2.0%
Prior	2.9%
Revised	n/a

Down, but not yet at ‘traditional’ recession levels, particularly with exports as strong as they are.

Retail Sales TABLE

From Karim:

Recent trend intact and in line with confidence surveys:

Nominal gwth zero for Q1 consumer spending

March retail sales +0.2%, +0.1% ex-autos, 0.0% ex-gas, and +0.2% for control group (autos, gas, and building materials)

Building materials down 1.6% shows housing decline continues to exert impact

Following items also negative: electronics -0.4%, furniture -0.3%, clothing -0.5%. Food +0.4% and gas +1.1%, lead the way.

Despite minor upward revision to February, 3mth annualized rate of change 0.0% for overall retail sales and -2.2% for retail sales ex-gas.

Business Inventories (Feb)

Survey	0.6%
Actual	0.6%
Prior	0.8%
Revised	0.9%

Business Inventories YoY

Survey	n/a
Actual	5.2
Prior	4.9
Revised	n/a

Inventories still very low for a recession, if we are in one.

2008-04-11 US Economic Releases

Posted on April 11, 2008 @ 8:49 am (Friday) by WARREN MOSLER

Import Price Index MoM (Mar)

Survey	2.0%
Actual	2.8%
Prior	0.2%
Revised	n/a

Import Price Index YoY (Mar)

Survey	13.7%
Actual	14.8%
Prior	13.6%
Revised	13.4%

This is a very strong inflation channel.

U. of Michigan Confidence (Apr P)

Survey	69.0
Actual	63.2
Prior	69.5
Revised	n/a

From Karim:

Michigan survey takes out low from 1990-91 recession; prior lowest point was March 1982. Decline was from 69.5 to 63.2

U. of Michigan Survey since 1980

Interesting how low ‘confidence’ is in light of how much better GDP and employment is doing now vs then.

Part of it is the rising influence of the media, and part are the factors behind the export boom that are causing us to consume less and instead export more of our own output.

The channel this time around is rising costs for food and energy take away the purchasing power power needed to buy the rest of our output, and foreigners get to consume it instead via US exports.

5-10yr inflation expectations move to higher end of recent range

5yr Ahead Inflation Expectations

Yes, it’s part of the equation, as above, and the FOMC ‘knows’ it can’t allow inflation expectations to elevate.

While the Fed gives the 5 year more weight, it also watches the one year, particularly when it spikes.

1 yr Inflation Expectations

In today’s report the one year survey hit 4.8%, they highest since one 4.8% reading in 1990. The only time it’s been higher was during the ‘great inflation’ of the 70’s- early 80’s.

Worsening confidence also visible in job leavers component of employment report-% of workers who voluntarily leave their jobs (chart 3). Tends to rise when times are good and vice-versa. When declining, tends to be associated with lower wage growth and core CPI (an important piece of the output gap argument).

Other comments from Michigan survey make from grim reading:

There have only been a dozen other surveys that have recorded a lower level of consumer sentiment in the more than fifty-year history of the survey.

Consumers expected gains in their nominal incomes of just 1.0% in April, the smallest gain expected in three decades.

Three-in-four consumers expected bad times financially in the overall economy during the year ahead, the largest proportion recorded since 1980, and the fourth highest proportion in more than fifty years.

A record 41% of all home owners reported that their home had lost value during the past year

Just 5% of all consumers expected the unemployment rate to decrease in the year ahead, the smallest proportion ever recorded.

Uncertainty about future income and job prospects has had a devastating impact on buying plans, with consumers citing these uncertainties three times as frequently as they did a year ago. Purchase plans for furniture, appliances, home electronics, and similar goods fell to their lowest level since the 1990 recession, with one-third of all consumers specifically mentioning their uncertainty about jobs and incomes as their primary reason. Vehicle buying plans also fell to their lowest level since the 1990 recession, with one-third of all consumers citing uncertainty about jobs and incomes as well as the future price of gasoline.

That’s the Bernanke vision as per his latest congressional testimony- less consumption and more exports and investment. Looks good, feels bad.

2008-04-10 US Economic Releases

Posted on April 10, 2008 @ 12:25 pm (Thursday) by WARREN MOSLER

Trade Balance (Feb)

Trade Balance TABLE

Survey	-$57.5B
Actual	-$62.3B
Prior	-$58.2B
Revised	-$59.0B

Exports still accelerating- up 2% over last month, a 26%+ annual rate, and 20.8% year over year.

Looks like an anomaly with imports, up 3.1% month over month and petroleum imports down. Very odd for non petroleum imports to be up – look for adjustments with next month’s number.

While this February number means Q1 GDP will be revised lower, the March report is likely to more than reverse this.

Initial Jobless Claims (Apr 5)

Survey	383K
Actual	357K
Prior	407K
Revised	410K

Back down but 4 week moving average still inching up some.

Not at recession levels yet.

Continuing Claims (Mar 29)

Survey	2935K
Actual	2840K
Prior	2937K
Revised	n/a

This lags a week. It has moved up over the last year, but still far from previous recession levels.

ICSC Chain Stores Sales YoY (Mar)

Survey	0.9%
Actual	-0.5%
Prior	1.9%
Revised	n/a

Consumer remained weak in March – that’s what an export economy looks like.

Monthly Budget Statement (Mar)

Survey	-$70.0B
Actual	-$48.1B
Prior	-$96.3B
Revised	n/a

Monthly Budget Statement TABLE

2008-04-09 US Economic Releases

Posted on April 9, 2008 @ 8:06 am (Wednesday) by WARREN MOSLER

MBAVPRCH Index (Apr 4)

Survey	n/a
Actual	384.7
Prior	356.0
Revised	n/a

If this is a recession, it’s not much of one, and housing is slowly bottoming and turning back up some.

MBAVREFI Index (Apr 4)

Survey	n/a
Actual	2724.7
Prior	2636.0
Revised	n/a

The refi machine is far from dead.

Wholesale Inventories

Survey	0.5%
Actual	1.1%
Prior	0.8%
Revised	1.0%

[comments]

2008-04-08 US Economic Releases

Posted on April 8, 2008 @ 8:48 pm (Tuesday) by WARREN MOSLER

COMMENTS TO COME!!

Pending Home Sales MoM (Feb)

Survey	-1.0%
Actual	-1.9%
Prior	0.0%
Revised	0.3%

Pending Home Sales Total SA

Survey	n/a
Actual	84.6
Prior	86.2
Revised	n/a

Last month revised to actually being up a tad, but back down this month.

Not going anywhere as of February, but still a winter number.

IBD/TIPP Economic Optimism (Apr)

Survey	41.5
Actual	39.2
Prior	42.5
Revised	n/a

ABC Consumer Confidence (Apr 6)

Survey	n/a
Actual	-34
Prior	-33
Revised	n/a

Still looking to me as turning to the upside. A stable stock market should help a lot.

2008-04-07 US Economic Releases

Posted on April 7, 2008 @ 8:59 pm (Monday) by WARREN MOSLER

Consumer Credit (Feb)

Survey	$5.9B
Actual	$5.2B
Prior	$6.9B
Revised	$10.3B

Consumer Credit TABLE

Decent fall off in consumer credit in line with reduced consumer spending.

2008-04-04 US Economic Releases

Posted on April 4, 2008 @ 8:48 am (Friday) by WARREN MOSLER

Unemployment Rate (Mar)

Unemployment Rate since 1998

Survey	5.0%
Actual	5.1%
Prior	4.8%
Revised	n/a

From Karim:

Very weak report. Among the high(low)lights:
Unemployment rate rises from 4.8% to 5.1%
NFP -80k; net revisions -67k (Jan and Feb now down -76k in each month)
Household survey shows 434k rise in number of unemployed
Construction -51k; manufacturing -48k;retail -12k; professional and business services -35k; education +42k; government +12k
Index of aggregate hours up 0.2% but down -1.2% annualized in Q1; all but assuring negative Q1 growth
Diffusion index up from 43.6 to 47.6

Change in Nonfarm Payrolls (Mar)

Survey	-50K
Actual	-80K
Prior	-63K
Revised	-76K

Change in Manufacturing Payrolls (Mar)

Survey	-35K
Actual	-48K
Prior	-52K
Revised	-46K

Payrolls lower than expected, previous months revised down some, confirming Q1 GDP somewhere around zero, and a flattish start for Q2 as well.

Not much of a market response, as this kind of weakness is no longer seen to threaten ‘market functioning’.

The perception of tail risk to market functioning is greatly diminished due to market perceptions that the Fed/Tsy is standing by to ‘write the check’ and that the checks won’t bounce.

Yes, they can be inflationary, and make the USD go down, but govt checks will clear and nominal demand can be sustained as desired.

The balance of risks are slowly returning to the more traditional/mainstream inflation vs growth and the appropriate interest rate policy to sustain the output gap necessary for price stability.

New data points for the Fed:

flat growth at best,

5.1% unemployment,

and yet demand is high enough to keep crude over $105, food prices skyrocketing, inflation at 4%, and the dollar falling like a stone and driving other import prices up.

And for as long as they can remember their forecasting models for prices have been unreliable at best.

Weaker growth with higher inflation likely tips their models to requiring a higher output gap (higher unemployment) to bring inflation down over their two year horizon.

Average Hourly Earnings MoM (Mar)

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

Average Hourly Earnings YoY (Mar)

Survey	3.6%
Actual	3.6%
Prior	3.7%
Revised	n/a

Average Weekly Hours (Mar)

Survey	33.7
Actual	33.8
Prior	33.7
Revised	n/a

Never actually goes down.

2008-04-03 US Economic Releases

Posted on April 3, 2008 @ 7:07 pm (Thursday) by WARREN MOSLER

Initial Jobless Claims (Mar 29)

Survey	366K
Actual	407K
Prior	366K
Revised	369K

Continuing Claims (Mar 22)

Survey	2860K
Actual	2937K
Prior	2845K
Revised	2840K

This is now more in line with what’s looked like near zero growth for the first quarter, and not much more is expected for Q2.

While fear of systemic risk has been reduced with the realization that the Fed/Tsy can -and probably will- simply ‘write checks’ as needed, that doesn’t guarantee general weakness won’t continue.

As Karim has been indicating, we may be near the end of rate cuts, but continued weakness could mean rates stay down for a ‘considerable period.’

Also note markets aren’t (yet) moving much on this.

With reduced systemic risk fears, these types of numbers are more ‘rear view mirror’ events than forward looking regarding the future of GDP growth.

In other words, data can be forward looking for some purposes, like systemic risk, and rear view mirror for other purposes, like GDP growth.

Also, Bernanke pointed to differences between now and the 1930’s, leaving out the largest factor – the gold standard. With a fixed exchange rate policy the govt can’t ‘simply write checks’ as that tends to result in outflows of gold/spikes in interest rates that can quickly lead to default/devaluation.

(The US shut down in the payments system in 1934 and reopened with a domestically suspended gold standard and federal deposit insurance.)

From Karim:

Initial claims spike from 369k to 407k; a labor department spokesman said that more claims were processed last week due to good Friday holiday the week before

So that means that the rate of change is exaggerated, but not the level (prior week should have been more than 369k

Continuing claims (which come out with a 1 week lag) rose from 2840k to 2937k; if to follow the same pattern as continuing claims, should rise again next week

Employment component of last non-mfg ISM will be important in shaping final estimates for payrolls tomorrow; right now looks to be about flat

ISM Non-Manf. Composite (Mar)

Survey	48.5
Actual	49.6
Prior	49.3
Revised	n/a

Nice bounce off the bottom though longer term still drifting lower.

ISM TABLE (Mar)

From Karim:

Consolidating at contraction levels; employment unch at 46.9;

Yes, bodes for flat Q1 and probably a slow start to Q2.

inventory
sentiment remains poor (inventories too high)

Yes, meaning they are running relatively lean for a recession.

Also, new orders up some export orders up very sharply to 55, indicating continuing weakness for domestic demand but exports picking up the slack and then some.

Prices paid up and too high as well.

Weakness and higher prices continues.

(Crude now up on the day.)