Economic Reports 05/03/07
Summary: Open wide for this spoon of pablum..."initial claims at lowest level since Jan"... a slobbering frock check reveals...
someone is drooling... last weeks claims revised up and this week the 4 week MA for continuing claims is still rising.
Open wide for a 2nd spoonful... headline news "Productivity up more than expected" ... a pat on the back reveals...
a stinkin belch... business productivity growth at the slowest rate since 1995, hours worked being cutback and real compensation falling across the board.
Open wide for that last spoonful... "ISM Services up more than expected"... a diaper check reveals...
a steamin "mustard" pile.... prices rising, inventories stagnant, backlogs dwindling, deliveries still slowing...
Initial Claims 04/28 -21K @ 305K Full Report
Inside the number: prior week revised up 5K from 321K to 326K; 4 week MA dropping 4.5K to 328.75K.
Continuing claims down 93K to 2M; but 4 week MA still rising 1.5K to 2.53M.
State Change State Supplied Comment
TN +1,343 industrial machinery, chemical, and trade.
RI +1,371 service industry.
LA +1,448 No comment.
NC +2,675 transportation equipment, construction, textile, printing/publishing, and rubber/plastics.
CT +2,783 transportation and service.
MI +3,451 automobile.
MA +5,564 transportation and service.
Productivity-Prel Q1 +1.7% vs prior +2.1% Full Report
Inside the number: Q4 revised up to +2.1% vs prior 1.6%, so productivity gains decelerated in Q1 to 1.7%.
We have commented previously on the Mathusian Impasse, (this is where productivity hits a technological wall and no further meaningful gains can be had.) and it has really taken root in 06 & Q107.
Economists attributed some of the improvement in labor costs to the way the government accounts for end of year bonuses. Another oddity was the weakness in hours worked.
With such confusing numbers, economists said it was probably best to average Q1 & Q4.
Under this method, productivity growth rose 1.9% and unit labor costs were up 3.4%. This is consistent with an expectation of a trend of slowing productivity with some upward pressure on labor costs.
Better yet, Yoy % change in business productivity +0.9%, the weakest growth since Q4 1995, over 12 years.
Still better, The implicit price deflator for the business sector, which reflects changes in both unit labor costs and unit nonlabor payments... Q406 +1%... smoking hot in Q107 +3.7%...
More "good" news: (Table A) Taking into account changes in consumer prices, real compensation is down across the board...
In Q1 alone: Business -1.9%; Non Farm -1.5%... Yoy: Business -0.3%; Non Farm 0.0; Manufacturing -0.9%; Durable -0.3%; Non Durable -2%
And hours are getting cut back... Q1 Hours worked: Business 0.0%; Non Farm -0.3%; Manufacturing -1.1%
ISM Non Manufacturing Services Apr 56 vs prior 52.4 Full Report
Inside the number: Good news... new orders up 55.5% vs 53.8%, halting a four-month decline. Employment up 51.9% vs 50.8%...
Bad news... Prices paid rising to an eight month high of 63.5% vs 63.3%. Inventory flat 52 vs prior 52.
Backorders dwindling 50 vs prior 52.5; supplier deliveries slowing 51 vs prior 50.
"Sales in the first three months of the year are slower than expected while pressure to lower prices is increasing." (Wholesale Trade).... number in parentheses for consecutive months:
Up in Price: Airfare (2); Aluminum; Cardboard; Construction Services; Copper Wire; Copy Paper; Electricity (3); #1 Diesel Fuel (2); #2 Diesel Fuel (2); Freight/Shipping (3); Fuel (3); Fuel Surcharges; Gasoline (6); Gasoline Related; Hotel Costs (11); Labor; LDPE Films; Nickel Material; Office Furniture; Paper (39); Paper Products; Petroleum; Petroleum Products; Stainless Steel Products; and Transportation.
Down in Price: Lumber — Pine, Spruce and Treated; and Computer Equipment.
2 industries shrinking: wholesale trade and professional services. 3 "commodities" in short supply: Construction services and contractors, purchasing professionals, and tires.
Translated: Housing starts pulled back for the contractors, the construction guys got laid off...
the service sector layoffs have just started, materials and consumer purchasing dropped off...
truck and auto sales slid, less trucks and people driving to work... means less tires needed.
someone is drooling... last weeks claims revised up and this week the 4 week MA for continuing claims is still rising.
Open wide for a 2nd spoonful... headline news "Productivity up more than expected" ... a pat on the back reveals...
a stinkin belch... business productivity growth at the slowest rate since 1995, hours worked being cutback and real compensation falling across the board.
Open wide for that last spoonful... "ISM Services up more than expected"... a diaper check reveals...
a steamin "mustard" pile.... prices rising, inventories stagnant, backlogs dwindling, deliveries still slowing...
Initial Claims 04/28 -21K @ 305K Full Report
Inside the number: prior week revised up 5K from 321K to 326K; 4 week MA dropping 4.5K to 328.75K.
Continuing claims down 93K to 2M; but 4 week MA still rising 1.5K to 2.53M.
State Change State Supplied Comment
TN +1,343 industrial machinery, chemical, and trade.
RI +1,371 service industry.
LA +1,448 No comment.
NC +2,675 transportation equipment, construction, textile, printing/publishing, and rubber/plastics.
CT +2,783 transportation and service.
MI +3,451 automobile.
MA +5,564 transportation and service.
Productivity-Prel Q1 +1.7% vs prior +2.1% Full Report
Inside the number: Q4 revised up to +2.1% vs prior 1.6%, so productivity gains decelerated in Q1 to 1.7%.
We have commented previously on the Mathusian Impasse, (this is where productivity hits a technological wall and no further meaningful gains can be had.) and it has really taken root in 06 & Q107.
Economists attributed some of the improvement in labor costs to the way the government accounts for end of year bonuses. Another oddity was the weakness in hours worked.
With such confusing numbers, economists said it was probably best to average Q1 & Q4.
Under this method, productivity growth rose 1.9% and unit labor costs were up 3.4%. This is consistent with an expectation of a trend of slowing productivity with some upward pressure on labor costs.
Better yet, Yoy % change in business productivity +0.9%, the weakest growth since Q4 1995, over 12 years.
Still better, The implicit price deflator for the business sector, which reflects changes in both unit labor costs and unit nonlabor payments... Q406 +1%... smoking hot in Q107 +3.7%...
More "good" news: (Table A) Taking into account changes in consumer prices, real compensation is down across the board...
In Q1 alone: Business -1.9%; Non Farm -1.5%... Yoy: Business -0.3%; Non Farm 0.0; Manufacturing -0.9%; Durable -0.3%; Non Durable -2%
And hours are getting cut back... Q1 Hours worked: Business 0.0%; Non Farm -0.3%; Manufacturing -1.1%
ISM Non Manufacturing Services Apr 56 vs prior 52.4 Full Report
Inside the number: Good news... new orders up 55.5% vs 53.8%, halting a four-month decline. Employment up 51.9% vs 50.8%...
Bad news... Prices paid rising to an eight month high of 63.5% vs 63.3%. Inventory flat 52 vs prior 52.
Backorders dwindling 50 vs prior 52.5; supplier deliveries slowing 51 vs prior 50.
"Sales in the first three months of the year are slower than expected while pressure to lower prices is increasing." (Wholesale Trade).... number in parentheses for consecutive months:
Up in Price: Airfare (2); Aluminum; Cardboard; Construction Services; Copper Wire; Copy Paper; Electricity (3); #1 Diesel Fuel (2); #2 Diesel Fuel (2); Freight/Shipping (3); Fuel (3); Fuel Surcharges; Gasoline (6); Gasoline Related; Hotel Costs (11); Labor; LDPE Films; Nickel Material; Office Furniture; Paper (39); Paper Products; Petroleum; Petroleum Products; Stainless Steel Products; and Transportation.
Down in Price: Lumber — Pine, Spruce and Treated; and Computer Equipment.
2 industries shrinking: wholesale trade and professional services. 3 "commodities" in short supply: Construction services and contractors, purchasing professionals, and tires.
Translated: Housing starts pulled back for the contractors, the construction guys got laid off...
the service sector layoffs have just started, materials and consumer purchasing dropped off...
truck and auto sales slid, less trucks and people driving to work... means less tires needed.
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