Economic Reports I 11/15/06

Summary: CPI dropping on automotive & energy price cuts, Core CPI still rising, jobless claims coming from declining automotive and construction sectors, foreign private investors selling off US T bonds & notes, overall manufacturing output & utilization falling due to a weak auto sector.

Oct CPI -0.5% vs prior -0.5%
Full Report

Inside the number: 2nd straight decline in CPI due to falling energy (-7%) prices and automobile prices. Food +0.3%, Rents and owners' equivalent rent +0.4%, Medical care +0.3%, Hospital services +0.4%.

Core CPI still rising +0.1% vs prior +0.2%, the core has risen 2.7% in the last year.

Initial Claims -2K @ 308K vs prior revised up 310K
Full Report

Inside the number: continuing claims unchanged at 2.44M. Michigan and Georgia with a large number of layoffs in the auto manufacturing sector. Other states mentioned more layoffs in construction, manufacturing and trade industries.

Sept Net Foreign Purchases $65.1B vs prior revised down $114.4B
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Inside the number: Official institutions bought $16.7B with net $7.7B of that being Treasury bonds & notes. Private Investors bought $71.3B with negative $8.1B of that being a SELL OFF in T bonds & notes.

This months foreign inflows weren't enough to cover the U.S. current account deficit, which has been running at about $70B a month.

Oct Industrial Production +0.2% vs prior -0.6%
Full Report

Inside the number: On a large jump in utilities utilization rates (+4.1% vs prior -4.6%), Oct Capacity Utilization up to 82.2% vs prior revised up 82.1%.

Capacity utilization in manufacturing slid to 80.7% from 81%. Manufacturing output -0.2%, due to the weak auto sector. Output of motor vehicles -3.9, after -1.9% the previous month.

Ex auto, manufacturing output up +0.1%, on the year ex auto manufacturing +5.5%. This month production of durable goods -2.6% mainly on the auto sector emasculation.

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