Economic Reports 06/06/07
Summary: The Malthusian Impasse is in full effect, so stick a fork in productivity gains, their done, and stagflation rages on unabated.
The slowest overall output growth in 4 years and the slowest non financial output growth in 15 years.
ECB raising 25bps as expected on LOWERED medium term growth estimates and fears of further energy price increases. Sounds like stagflation to me....
Productivity-Rev. Q1 +1.0% vs prior 1.7% Full Report
Inside the number: Annualized in Q1... Total Business Output +0.4%, hours worked -0.1%, real hourly compensation -1.4%.
Non Farm Business Output +0.6%, hours worked -0.4% and real hourly compensation -1%.
The Emasculation: Durable Goods Manufacturing Output -0.4%, hours worked -2.5%, real hourly compensation +4.5%
Even more troubling and as stated before in these pages, we have hit a Malthusian impasse. AKA Greenspuns productivity "miracle" has been exposed as anything but.
The Malthusian Impasse: further gains in productivity through labor at margin and technological supply chain and work process refinement will be minimal and have negligible effect.
The Malthusian Impasse evidenced...
Weak growth? Productivity in the nonfinancial sector +0.6% in Q1 and +0.3% over the past four quarters, the weakest growth since Q4 1993.
Sinking profits? From Table D & 6: % change in unit profits Q406 negative -25.6%; for Q107 negative -1.9%.
Stagflation anyone? From Table B & 6: % change in the implicit price deflator; Q107 Yoy +2%; Quarterly +3.7% Shhhhh!!! SILENCE!!!!!
Pay no heed to the man behind the curtain, click your heels three times and repeat Benny and the Feds mantra...
There is no inflation, there is no inflation, there is no inflation...
ECB Rate Announcement raising +25bps to 4%. Full Statement
Inside the number: Lowered annual growth estimates + fear of further oil price increases = stagflation.
"This decision was taken in view of the prevailing upside risks to price stability over the medium term.
Global economic growth has become more balanced across regions and, while moderating somewhat...
Projections foresee average annual real GDP growth in a range between 2.3% and 2.9% in 2007 and between 1.8% and 2.8% in 2008.
At medium to longer horizons, the balance of risks remains on the downside...
...fears of a rise in protectionist pressures, the possibility of further increases in oil prices...
concerns about possible disorderly developments owing to global imbalances and potential shifts in financial market sentiment.
Staff projects average annual HICP inflation of between 1.8% and 2.2% in 2007 and between 1.4% and 2.6% in 2008.
The range projected for inflation in 2007 is somewhat higher, largely reflecting higher oil prices.
The ongoing strength of monetary expansion is reflected in the continued rapid growth of M3...
which reached an annual rate of 10.4% in April, as well as the still high level of credit growth.
There are several indications that higher short-term interest rates are now influencing monetary dynamics."
The slowest overall output growth in 4 years and the slowest non financial output growth in 15 years.
ECB raising 25bps as expected on LOWERED medium term growth estimates and fears of further energy price increases. Sounds like stagflation to me....
Productivity-Rev. Q1 +1.0% vs prior 1.7% Full Report
Inside the number: Annualized in Q1... Total Business Output +0.4%, hours worked -0.1%, real hourly compensation -1.4%.
Non Farm Business Output +0.6%, hours worked -0.4% and real hourly compensation -1%.
The Emasculation: Durable Goods Manufacturing Output -0.4%, hours worked -2.5%, real hourly compensation +4.5%
Even more troubling and as stated before in these pages, we have hit a Malthusian impasse. AKA Greenspuns productivity "miracle" has been exposed as anything but.
The Malthusian Impasse: further gains in productivity through labor at margin and technological supply chain and work process refinement will be minimal and have negligible effect.
The Malthusian Impasse evidenced...
Weak growth? Productivity in the nonfinancial sector +0.6% in Q1 and +0.3% over the past four quarters, the weakest growth since Q4 1993.
Sinking profits? From Table D & 6: % change in unit profits Q406 negative -25.6%; for Q107 negative -1.9%.
Stagflation anyone? From Table B & 6: % change in the implicit price deflator; Q107 Yoy +2%; Quarterly +3.7% Shhhhh!!! SILENCE!!!!!
Pay no heed to the man behind the curtain, click your heels three times and repeat Benny and the Feds mantra...
There is no inflation, there is no inflation, there is no inflation...
ECB Rate Announcement raising +25bps to 4%. Full Statement
Inside the number: Lowered annual growth estimates + fear of further oil price increases = stagflation.
"This decision was taken in view of the prevailing upside risks to price stability over the medium term.
Global economic growth has become more balanced across regions and, while moderating somewhat...
Projections foresee average annual real GDP growth in a range between 2.3% and 2.9% in 2007 and between 1.8% and 2.8% in 2008.
At medium to longer horizons, the balance of risks remains on the downside...
...fears of a rise in protectionist pressures, the possibility of further increases in oil prices...
concerns about possible disorderly developments owing to global imbalances and potential shifts in financial market sentiment.
Staff projects average annual HICP inflation of between 1.8% and 2.2% in 2007 and between 1.4% and 2.6% in 2008.
The range projected for inflation in 2007 is somewhat higher, largely reflecting higher oil prices.
The ongoing strength of monetary expansion is reflected in the continued rapid growth of M3...
which reached an annual rate of 10.4% in April, as well as the still high level of credit growth.
There are several indications that higher short-term interest rates are now influencing monetary dynamics."
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