Economic Reports 06/14/07

Summary: We need to trot out that lovable little pig in a poke....

today's Soohey Pig Pig award goes to Stephen Gallagher, economist for Societe Generale for the following statement:

"There is no hard evidence that higher energy costs are being passed along to other finished manufacturing goods."

The Nattering One muses perhaps Mr. Gallagher like Dubya Shrub, believes he is not descendant from apes...

and would make the statement "There is no hard evidence that DNA is inheirited". NEXT!!!!

PPI shows growing pipeline pressure, tomorrows CPI will show stagflation still ragin. Initial claims still wrought with pernicious unemployment.

After reading the May PPI, take a big toke of whatever Gallagher's smokin and repeat: There is no hard evidence that higher energy costs are being passed on...

Aside from all the hard evidence in the world, all one need do is look at the increased cost of goods being imported from China.

Neither, productivity gains nor labor at the margin can stop this stagflation or our impending date to pay the piper for the dance since 01...

Energy based stagflation in the global supply chain; emasculated US economic base; demise of construction/housing (since 01: creator of 75% of all new US jobs);

closing of the housing mortage equity withdrawl spigot (since 01: creator of $2.5 Trillion in consumer spending) ; higher market interest rates; lowered consumer spending by unit sales;

all resulting in a zero growth economy and global economic malaise... and all combining to force the Fed into a corner... and LOWER rates in Sept or Oct.

Initial Claims 06/09 311K vs prior 311K Full Report

Inside the number: prior revised up 2K from 309K. 4 week MA +3.75K to 311.25K; continuing claims -43K to 2.487M; 4 week MA +4K to 2.501M.

Initial claims represent job destruction, while the level of continuing claims indicates how hard or easy it is for displaced workers to find new jobs.

Yoy initial claims -1% while continuing claims +3%. This week's report shows FEWER layoffs in service, construction, trade and manufacturing industries.

But just the mention, means that layoffs are still occuring...

STATES WITH A DECREASE OF MORE THAN 1,000
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State Change State Supplied Comment
CA -6,948 service
TX -1,916 construction, trade, manufacturing
NJ -1,668 construction, trade, service, manufacturing
NY -1,548 construction, service, manufacturing
FL -1,101 construction, trade, service, manufacturing industries.
WA -1,005 No comment.

PPI May +0.9% vs prior +0.7% Full Report

Inside the number: Bottom line, no matter how you slice or dice it... all goods categories outside the core rising at a 12% plus annual rate.

Core PPI +0.2% vs prior +0.0%. Energy +4.1%; Food -0.2%. Over 12 months headline inflation +4.1%, the mythical core +1.6%, core intermediate PPI +2.9%.

Sequential: Finished goods +0.9%; intermediate goods +1.1%; core intermediate goods +0.4%; crude goods +2%; all commodites +1.3%.

Slowing economy.... real estate sales -1%; lumber -1.3%; YOY -17%; trucking -0.1%; warehousing -0.3%; air transport -8.4%.

John Q in a vice grip... grocery +1.9%; pharmaceuticals +0.4%; lawyers +0.5%; gasoline +10.2%.

Decline of 35% in Vegetables, largest in 5 years. Dairy increased 4.5%, largest in 3 years on milk +8.7%; blame it on ethanol... corn +4.6%; soybeans +6%.

YOY Table 2: Don't drive... gasoline +13.9%; Don't heat... liquified petroleum gas +9.7%;

Don't eat... fresh fruit & melons +40.4%; eggs +75%; rice+17%; beef +11.3%; pork +15.4%; chicken +35.6%; dairy +18.1%; milk +48.4%; corn +60%.

Stay at home on the web... PC's -22.6%; electronic components -7.7%.

YOY Table 1: finished Consumer Goods Crude +15.3%; materials for food manufacturing +11.9%; intermediate materials manufacturing +10.1%.

Crude materials less energy +21.3%; crude non food materials less energy +9.2%. Oh and FYI from Table 4: YOY net output gasoline stations +102.2%