PMI, Employment Index, Michigan Sentiment, Advance GDP, PCE & GDP Deflator
Bad news first: Employment spending for Q106 at its slowest level in 11 years, checking in at +0.6% down from +0.8%.
YOY, employment costs +2.8%, down from a 3.1% rise in Q405. This marked the smallest YOY increase since December 1995. Full Report
More bad news: University of Michigan consumer sentiment index slipped to 87.4 in April from 88.9 in March.
Still more bad news: The Chicago PMI fell in April, reaching 57.2 from 60.4 while the employment index plunged to 47.2 from 55.6, the first reading under 50 since last fall.
Yet, GDP grew at a 4.8% annual rate in Q106, more than twice Q405's 1.7% rate. GDP deflator advanced at a 2% rate in Q1 compared with 2.4% in Q4 last year. Thats Personal Consumption Expenditures less food and energy.
The media hopped on this quicker than Angelina Jolie adopts kids: "The highest jump in 2.5 years." and "GDP deflator down."
"The acceleration in real GDP growth in the first quarter primarily reflected an acceleration in PCE for durable goods, an upturn in federal government spending, and accelerations in equipment and software and in exports that were partly offset by a downturn in private inventory investment."
Inside the number: lets see now, new home construction has slowed down, oil and gasoline prices went through the sky. That's what knocked Michigan confidence and Chicago PMI down.
Really bad news From Table 8 of the report: PCE Price Index Quarterly % change YOY Q405 +3%; Q106 +3%. Guess what?? Not excluding food and energy means that the price index YOY is STILL increasing at 3% per quarter. NOTHING WENT DOWN.
In FACT, Q205 +2.5% add that to Q305 +3% and Q405 +3% and Q106 +3% that equals 11.5% in the last year. There's your REAL INFLATION NUMBER!!!! Straight from the horses mouth. Read the full report for yourself.
As for Q106's lofty GDP, this was boosted by gulf reconstuction efforts, which we have previously noted in these pages, could mask a slow down in the housing sector, and consumer pullback.
Energy input and commodity stagflated inputs are being used in the reconstruction effort. And we all know how thrifty the government is with their spending and contract cronyism (read Halliburton).
This forces up inflation further, masks the slowdown and consumer squeeze that is occuring, and keeps the Fed raising.
Guess what? News flash: Uncle started spending again!!! Q106 Federal government spending shot up at a +10.8% rate, a sharp contrast to the -2.6% rate in Q405. It was the strongest government spending since a 22.1 % jump in Q203.
As for consumer spending: "Real gross domestic purchases -- purchases by U.S. residents of goods and services wherever produced -- increased 5.4 percent in the first quarter, compared with an increase of 2.9 percent in the fourth."
"Real personal consumption expenditures increased 5.5 percent in the first quarter, compared with an increase of 0.9 percent in the fourth."
Can you say energy pass through stagflation? I can. Can you say higher costs at the pump? I can. Theres your "increased" spending, and we saw the results of this spending in the latest oil company quarterly profit reports, didn't we now??
Whats amazing is John Q. Public is spending more due to energy pass through stagflation despite having less money in his pocket to spend. "Real disposable personal income increased 3.8 percent, compared with an increase of 6.7 percent in Q4."
Question: Since Uncle and John Q. are putting themselves in debtors jail to spend, can the greedy button down collar corporate clone ass clowns step up to the plate and deliver?
News flash: Business investment was way up during Q1, with spending rising at a 14.3% annual rate. That is triple the 4.5% Q4 increase and was the largest in nearly six years.
Spending on equipment and software +16.4% rate in Q1, after a 5% Q4 rise, the strongest in six years. Maybe there's hope after all?
The jury is still out on this one. Why? Because the advance GDP, GDP deflator and PCE numbers are all ESTIMATES. Heres the fine print disclaimer:
"The Bureau emphasized that the first-quarter "advance" estimates are based on source data that are incomplete or subject to further revision by the source agency (see the box on page 3).
The first-quarter "preliminary" estimates, based on more comprehensive data, will be released on May 25, 2006." I wait with baited breath, tither tither.
YOY, employment costs +2.8%, down from a 3.1% rise in Q405. This marked the smallest YOY increase since December 1995. Full Report
More bad news: University of Michigan consumer sentiment index slipped to 87.4 in April from 88.9 in March.
Still more bad news: The Chicago PMI fell in April, reaching 57.2 from 60.4 while the employment index plunged to 47.2 from 55.6, the first reading under 50 since last fall.
Yet, GDP grew at a 4.8% annual rate in Q106, more than twice Q405's 1.7% rate. GDP deflator advanced at a 2% rate in Q1 compared with 2.4% in Q4 last year. Thats Personal Consumption Expenditures less food and energy.
The media hopped on this quicker than Angelina Jolie adopts kids: "The highest jump in 2.5 years." and "GDP deflator down."
"The acceleration in real GDP growth in the first quarter primarily reflected an acceleration in PCE for durable goods, an upturn in federal government spending, and accelerations in equipment and software and in exports that were partly offset by a downturn in private inventory investment."
Inside the number: lets see now, new home construction has slowed down, oil and gasoline prices went through the sky. That's what knocked Michigan confidence and Chicago PMI down.
Really bad news From Table 8 of the report: PCE Price Index Quarterly % change YOY Q405 +3%; Q106 +3%. Guess what?? Not excluding food and energy means that the price index YOY is STILL increasing at 3% per quarter. NOTHING WENT DOWN.
In FACT, Q205 +2.5% add that to Q305 +3% and Q405 +3% and Q106 +3% that equals 11.5% in the last year. There's your REAL INFLATION NUMBER!!!! Straight from the horses mouth. Read the full report for yourself.
As for Q106's lofty GDP, this was boosted by gulf reconstuction efforts, which we have previously noted in these pages, could mask a slow down in the housing sector, and consumer pullback.
Energy input and commodity stagflated inputs are being used in the reconstruction effort. And we all know how thrifty the government is with their spending and contract cronyism (read Halliburton).
This forces up inflation further, masks the slowdown and consumer squeeze that is occuring, and keeps the Fed raising.
Guess what? News flash: Uncle started spending again!!! Q106 Federal government spending shot up at a +10.8% rate, a sharp contrast to the -2.6% rate in Q405. It was the strongest government spending since a 22.1 % jump in Q203.
As for consumer spending: "Real gross domestic purchases -- purchases by U.S. residents of goods and services wherever produced -- increased 5.4 percent in the first quarter, compared with an increase of 2.9 percent in the fourth."
"Real personal consumption expenditures increased 5.5 percent in the first quarter, compared with an increase of 0.9 percent in the fourth."
Can you say energy pass through stagflation? I can. Can you say higher costs at the pump? I can. Theres your "increased" spending, and we saw the results of this spending in the latest oil company quarterly profit reports, didn't we now??
Whats amazing is John Q. Public is spending more due to energy pass through stagflation despite having less money in his pocket to spend. "Real disposable personal income increased 3.8 percent, compared with an increase of 6.7 percent in Q4."
Question: Since Uncle and John Q. are putting themselves in debtors jail to spend, can the greedy button down collar corporate clone ass clowns step up to the plate and deliver?
News flash: Business investment was way up during Q1, with spending rising at a 14.3% annual rate. That is triple the 4.5% Q4 increase and was the largest in nearly six years.
Spending on equipment and software +16.4% rate in Q1, after a 5% Q4 rise, the strongest in six years. Maybe there's hope after all?
The jury is still out on this one. Why? Because the advance GDP, GDP deflator and PCE numbers are all ESTIMATES. Heres the fine print disclaimer:
"The Bureau emphasized that the first-quarter "advance" estimates are based on source data that are incomplete or subject to further revision by the source agency (see the box on page 3).
The first-quarter "preliminary" estimates, based on more comprehensive data, will be released on May 25, 2006." I wait with baited breath, tither tither.
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