EIA, Initial Claims, Home Sales, GDP, PCE
Initial Claims -40K to 329K
Inside the number: continuing claims +38K to 2.42M. YOY continuing claims -7%. Good news? NOT! Thats the number of people who were collecting and their benefits ran out. Full Report
EIA Inventory, Crude -3M Barrels
Inside the number: Gasoline +2.1M, Distillates +2.5M, YOY Crude +11.5M, Gasoline -6.9M, Distillates +11.4M. Demand for gasoline is steady, however refinery production is running at only 83%.
We will say it AGAIN, this is what is limiting gasoline supply and this is called an orchestrated production squeeze. Full Report
April Existing Home Sales -2% to 6.76M
Yesterday New Home Sales +4.9%, and our comment "housing is still breathing".
Inside the number: Inventory +5.8% to 3.38M homes, a six month supply and the largest inventory since January 1998. Existing Home Sales YOY -5.7%, just like new home sales.
Florida, California and Arizona are cooling, with inventories building up and prices beginning to fall. Rising interest rates and escalating prices have limited the number of potential buyers.
We think builders are starting to dump their inventory with deep price cuts. This is hampering the flippers and hurting existing home sales.
Just wait till the foreclosures really crank up, that will be the moment that housing draws its last breath. Full Report
Q106 GDP revised up to 5.3%, and yes, we told you so...
Inside the number: The upward revision was largely due to higher inventory investment, a lower trade deficit and higher government spending.
Q106 vs Q405: Real federal government consumption expenditures and gross investment +10.5% vs -2.6%. National defense +9.6% vs -8.9%. Nondefense +12.2% vs +11.7%.
Corporate profits Q106 vs Q405 +7.9% vs +14.4%. Don't feel sorry for them just yet... YOY Corporate profits +23.8%. However, the quarterly drop in corporate profit, is it a harbinger of things to come?.
As stated before, we are at a Malthusian Impasse where no further benefit can be had through technological efficiencies nor through outsourcing to labor at the margin.
Sprinkle in a dash of stagflation and inputs will continue to rise while margins get squeezed further.
Did a push through from Q405 to Q106 occur? Or, is there an economic rampup or downturn occuring? Inventories Q106 +$32.3 billion vs Q405 +$38B and vs Q305 -$13.3B. This inventory build drove up GDP and correlates with the NY Empire and Philly Fed numbers.
Consumer spending on durable goods +5.2%, spending on services +5.7%, but inflation strikes back in spending on nondurable goods +20.5%. When the Fed pauses, the dollar will begin to fall again and the trade deficit will widen further.
The Real GDP price index "stated" YOY increase was +3.2%, at its highest level since 1991. Witness inflation in the price index for goods purchased by consumers, Q405 +3.7%, Q106 +2.8%. Ex food & energy Q405 & Q106 an identical +3.2%.
Real personal consumption expenditures Q106 +5.2% vs +0.9 % in Q405. Extrapolating this increase over 12 months yields a potential for over 16% annual inflation.
We have found a new favorite in Appendix Table A: Real Gross Domestic Product and Related Aggregates and Price Indexes: % Change From Preceding Period [Quarters seasonally adjusted at annual rates].
Add up the last four quarters of Price Index increases for GDP, you get 12.7%. Add up PCE, you get 11.9%. Anyway you cut this cake, real inflation is raging conservatively at around 12%. Full report
Inside the number: continuing claims +38K to 2.42M. YOY continuing claims -7%. Good news? NOT! Thats the number of people who were collecting and their benefits ran out. Full Report
EIA Inventory, Crude -3M Barrels
Inside the number: Gasoline +2.1M, Distillates +2.5M, YOY Crude +11.5M, Gasoline -6.9M, Distillates +11.4M. Demand for gasoline is steady, however refinery production is running at only 83%.
We will say it AGAIN, this is what is limiting gasoline supply and this is called an orchestrated production squeeze. Full Report
April Existing Home Sales -2% to 6.76M
Yesterday New Home Sales +4.9%, and our comment "housing is still breathing".
Inside the number: Inventory +5.8% to 3.38M homes, a six month supply and the largest inventory since January 1998. Existing Home Sales YOY -5.7%, just like new home sales.
Florida, California and Arizona are cooling, with inventories building up and prices beginning to fall. Rising interest rates and escalating prices have limited the number of potential buyers.
We think builders are starting to dump their inventory with deep price cuts. This is hampering the flippers and hurting existing home sales.
Just wait till the foreclosures really crank up, that will be the moment that housing draws its last breath. Full Report
Q106 GDP revised up to 5.3%, and yes, we told you so...
Inside the number: The upward revision was largely due to higher inventory investment, a lower trade deficit and higher government spending.
Q106 vs Q405: Real federal government consumption expenditures and gross investment +10.5% vs -2.6%. National defense +9.6% vs -8.9%. Nondefense +12.2% vs +11.7%.
Corporate profits Q106 vs Q405 +7.9% vs +14.4%. Don't feel sorry for them just yet... YOY Corporate profits +23.8%. However, the quarterly drop in corporate profit, is it a harbinger of things to come?.
As stated before, we are at a Malthusian Impasse where no further benefit can be had through technological efficiencies nor through outsourcing to labor at the margin.
Sprinkle in a dash of stagflation and inputs will continue to rise while margins get squeezed further.
Did a push through from Q405 to Q106 occur? Or, is there an economic rampup or downturn occuring? Inventories Q106 +$32.3 billion vs Q405 +$38B and vs Q305 -$13.3B. This inventory build drove up GDP and correlates with the NY Empire and Philly Fed numbers.
Consumer spending on durable goods +5.2%, spending on services +5.7%, but inflation strikes back in spending on nondurable goods +20.5%. When the Fed pauses, the dollar will begin to fall again and the trade deficit will widen further.
The Real GDP price index "stated" YOY increase was +3.2%, at its highest level since 1991. Witness inflation in the price index for goods purchased by consumers, Q405 +3.7%, Q106 +2.8%. Ex food & energy Q405 & Q106 an identical +3.2%.
Real personal consumption expenditures Q106 +5.2% vs +0.9 % in Q405. Extrapolating this increase over 12 months yields a potential for over 16% annual inflation.
We have found a new favorite in Appendix Table A: Real Gross Domestic Product and Related Aggregates and Price Indexes: % Change From Preceding Period [Quarters seasonally adjusted at annual rates].
Add up the last four quarters of Price Index increases for GDP, you get 12.7%. Add up PCE, you get 11.9%. Anyway you cut this cake, real inflation is raging conservatively at around 12%. Full report
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