Economic News 12/21/06
Summary: Continuing unemployment still on the rise to its highest level since Feb. Leading indicators shows money supply & stock prices rising, home building & interest rate spreads shrinking.
Philly Fed shows a large drop in manufacturing, housing and a potential for additional future layoffs.
GDP revised down to lowest YOY growth since early 2003 on a collapse in homebuilding, reduced services spending, and "energy stagflation" in higher priced imports.
The markets found this mix of castor oil, distasteful. As the news does not bode well for the stagflation and economic slowdown we are experiencing.
Initial Claims +9K @ 315K Full Report
Inside the number: Increasing to the highest level since Feb. continuing claims +45K @ 2.52M.
The overall trend is rising as 4 week MA initial claims -2K @ 325.75K; but 4 week MA continuing claims +21.25K @ 2.49M
Leading Indicators Nov. +0.1% vs prior +0.2%
Inside the number: 4 of 10 leading indicators increased: money supply, vendor performance, core capital goods orders and stock prices.
5 indicators contracted: jobless claims, building permits, the interest rate spread, the factory workweek, and consumer expectations. Orders for consumer goods held steady.
Philadelphia Fed Dec. -4.3 vs prior +5.1 Full Report
Inside the number: The largest contraction since April 03, finished goods prices rising, backlogs vanishing, as new orders shrink, and extra workers get WIP out the door, increasing shipments. If new orders stay negative expect more layoffs soon.
New orders negative for the 2nd straight month, up from -2.5 to -2.4, unfilled orders down from -3.9 to -20.7, shipments index up from 6.5 to 19, employees up to 7.9 from 0.2, prices paid down to 20.6 from 26.7, prices received up to 9.9 from 5.7.
Final Q3 GDP +2.0 vs prior +2.2% Full Report
Inside the number: Residential investment -18.7% vs prior -11.1%, cutting 1.2% of GDP, the largest drag in this sector since 1981.
The magnitude of the collapse is witnessed by aggregate % change in structures expenditures falling from a high in Q303 +14.1% to a low Q306 -7.4%
Corporate before tax profits +3.9% at a quarterly rate in Q3 and +30.6% in the past year, the fastest growth in profits since 1984. Profits after taxes +31% in the past year.
Before tax profits +14.1% of national income, the highest share since 1950. After tax profits a record +10% of national income. Inventories growing to +$55.4B, +$1.7B increase over Q2.
Real imports up +5.6% vs prior +1.4%, Real PCE Q3 up +2.8% vs prior +2.6%, % change PCE index annual up 06 +2.9% vs 05 +2.6%, Services PCE down +2.8% vs prior +3.7%, Services Exports down +0.8% vs prior +6.7%.
Philly Fed shows a large drop in manufacturing, housing and a potential for additional future layoffs.
GDP revised down to lowest YOY growth since early 2003 on a collapse in homebuilding, reduced services spending, and "energy stagflation" in higher priced imports.
The markets found this mix of castor oil, distasteful. As the news does not bode well for the stagflation and economic slowdown we are experiencing.
Initial Claims +9K @ 315K Full Report
Inside the number: Increasing to the highest level since Feb. continuing claims +45K @ 2.52M.
The overall trend is rising as 4 week MA initial claims -2K @ 325.75K; but 4 week MA continuing claims +21.25K @ 2.49M
Leading Indicators Nov. +0.1% vs prior +0.2%
Inside the number: 4 of 10 leading indicators increased: money supply, vendor performance, core capital goods orders and stock prices.
5 indicators contracted: jobless claims, building permits, the interest rate spread, the factory workweek, and consumer expectations. Orders for consumer goods held steady.
Philadelphia Fed Dec. -4.3 vs prior +5.1 Full Report
Inside the number: The largest contraction since April 03, finished goods prices rising, backlogs vanishing, as new orders shrink, and extra workers get WIP out the door, increasing shipments. If new orders stay negative expect more layoffs soon.
New orders negative for the 2nd straight month, up from -2.5 to -2.4, unfilled orders down from -3.9 to -20.7, shipments index up from 6.5 to 19, employees up to 7.9 from 0.2, prices paid down to 20.6 from 26.7, prices received up to 9.9 from 5.7.
Final Q3 GDP +2.0 vs prior +2.2% Full Report
Inside the number: Residential investment -18.7% vs prior -11.1%, cutting 1.2% of GDP, the largest drag in this sector since 1981.
The magnitude of the collapse is witnessed by aggregate % change in structures expenditures falling from a high in Q303 +14.1% to a low Q306 -7.4%
Corporate before tax profits +3.9% at a quarterly rate in Q3 and +30.6% in the past year, the fastest growth in profits since 1984. Profits after taxes +31% in the past year.
Before tax profits +14.1% of national income, the highest share since 1950. After tax profits a record +10% of national income. Inventories growing to +$55.4B, +$1.7B increase over Q2.
Real imports up +5.6% vs prior +1.4%, Real PCE Q3 up +2.8% vs prior +2.6%, % change PCE index annual up 06 +2.9% vs 05 +2.6%, Services PCE down +2.8% vs prior +3.7%, Services Exports down +0.8% vs prior +6.7%.
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