Economic Reports 12/28/07
Summary: Chicago PMI documents a softening economy wrought with stagflation.
New Home Sales documents a continuance of the housing debacle with a 12 year low and the largest decline in 17 years.
Chicago PMI 56.6 vs prior 52.9 Full Report
Inside the number: Below 50 contracting. Production rate of expansion slowed 55.4 vs 57.4; Employment contracted & below neutral 4th time this year 49 vs 54.4.
Prices Paid rate of expansion slowed 63.8 vs 76.2. Inventories contracting for a 5th month 44 vs 47.1.
Supplied Deliveries faster for a 2nd month, a sign of a weakening economy, 47.9 vs 46
The evidence of a slowing economy was called into question. However, the overall trend continues to document a softening economy. Prices paid continued to document expanding inflation.
With broadening inflation and disappearing economic growth, the best that can be said is the economy is entering into, or is in, a state of no growth combined with rising inflation (stagflation).
New Home Sales Nov -9% at 647K vs prior 711K Full Report
Inside the number: Down 53% from the July 05 peak, at the lowest annual rate in 12 years and the largest YOY decline in 17 years.
Sales YOY -34.4%; YTD -25.4%. Inventory +5.7% at 9.3 months vs prior 8.8; YOY +43.1%.
Neal Soss, chief economist at Credit Suisse:
"The most important implication of this [housing sales decline] is it's going to drive down construction outlays and that's a direct effect on GDP."
More on this later.
New Home Sales documents a continuance of the housing debacle with a 12 year low and the largest decline in 17 years.
Chicago PMI 56.6 vs prior 52.9 Full Report
Inside the number: Below 50 contracting. Production rate of expansion slowed 55.4 vs 57.4; Employment contracted & below neutral 4th time this year 49 vs 54.4.
Prices Paid rate of expansion slowed 63.8 vs 76.2. Inventories contracting for a 5th month 44 vs 47.1.
Supplied Deliveries faster for a 2nd month, a sign of a weakening economy, 47.9 vs 46
The evidence of a slowing economy was called into question. However, the overall trend continues to document a softening economy. Prices paid continued to document expanding inflation.
With broadening inflation and disappearing economic growth, the best that can be said is the economy is entering into, or is in, a state of no growth combined with rising inflation (stagflation).
New Home Sales Nov -9% at 647K vs prior 711K Full Report
Inside the number: Down 53% from the July 05 peak, at the lowest annual rate in 12 years and the largest YOY decline in 17 years.
Sales YOY -34.4%; YTD -25.4%. Inventory +5.7% at 9.3 months vs prior 8.8; YOY +43.1%.
Neal Soss, chief economist at Credit Suisse:
"The most important implication of this [housing sales decline] is it's going to drive down construction outlays and that's a direct effect on GDP."
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