Economic Reports 11/28 - 12/01/06
We were on the road last week and endeavor to catch up on pertinent economic reports.
Summary: Domestic auto sales are still slowing and production keeps getting cut while initial jobless claims are rising.
Durable Orders, Chicago PMI & National ISM indexes show a decided slowing in the economy as inventories are building faster than sales.
Record declines in construction spending, new and existing home sales. All pointing towards what may not be a happy ending for all concerned as the Q3 GDP estimate reflects.
Auto & Truck Sales Nov. Ford -9.6%; GM +5.8%; Chrysler +4.7%; Toyota +15.9%
Initial Claims +34K @ 357K the highest level in the last year. Continuing cliams +45K @ 2.48M
Chicago PMI Nov 49.9 vs prior 53.5
Inside the number: the lowest level since Mar 01 and indicative of a contraction in the Chicago area.
Employment down to 49.4% from 57.0%, Prices paid down to 60.2% from 62.5%, New orders down to 52.0% from 54.1%, Inventories down to 57.7% from 67.2%.
ISM Index Nov 49.5 vs prior 51.2 Full Report
Inside the number: the 3rd straight decline showing an economic weakening as inventories are growing faster than sales.
New orders fell to 48.7 from 52.1%. Production fell to 48.5% from 51.9%. Employment fell to 49.2% from 50.8%. Prices paid rose to 53.5% from 47.0%. Inventories rose to 49.7% from 49.4%.
Durable Orders Oct -8.3% vs prior +8.7% Full Report
Inside the number: the largest drop in 6 years on a steep plunge in new orders for civilian aircraft -44.5%.
Weak demand for electronics -10.2%, defense goods -42.1% and fabricated metals -2.5%. Excluding transportation goods, orders -1.7%. Excluding defense goods, orders -6.4%, the largest decline in 4 years.
Bad news for tech, orders for computers -25.2%, the third lowest level in 13 years. Shipments of computers were at the lowest level since the data were first collected in 1992.
Core capital goods orders -5.1% causing concern for a deeper and broader economic slowing.
Construction Spending Oct -1% vs prior revised downward -0.8%
Inside the number: Private residential construction spending-1.9% vs prior -1.4%, the 7th consecutive and longest decline on record.
New Home Sales Oct -3.2% @ 1M Full Report
Inside the number: New home sales are -25.4% in the past year and sales of houses priced less than $200,000 (affordable) were -16%.
Existing Home Sales Oct +0.5% @ 6.24M vs prior 6.21M Full Report
Inside the number: The NAR tried to put a positive spin on the 1st increase since Feb.
However, YOY Sales -11.5%, and inventories of unsold homes +1.9% to 3.854M, a 7.4-month supply at the October sales rate. It's the largest supply since April 1993.
Worse yet, Median Sales Price YOY -3.5% @ 221K, the 1st time in history that prices have fallen 3 straight months and the largest decline ever recorded.
GDP-Prel. Q3 +2.2% vs prior +2.6% Full Report
Inside the number: Because much of the upward revision was due to inventory growth, the implications for Q4 growth could be negative.
YOY Profits +30.9%, the fastest growth in 22 years. Real disposable incomes -1.5% in Q2 as opposed to the +1.7% previously reported. Unit labor costs have not risen as fast as assumed and therefore workers have less money to spend.
Meanwhile stagflation still taking its toll, the core PCE price index -0.2% to +2.2%, and holding steady YOY at +2.4%.
Slowing housing market impact? Residential investment -18%, marking the largest decline in 15 years. Home building cut 1.2% points from GDP growth.
We shudder to think how bad this picture will look in another year as there is a large latency in the GDP and actual spending numbers.
Summary: Domestic auto sales are still slowing and production keeps getting cut while initial jobless claims are rising.
Durable Orders, Chicago PMI & National ISM indexes show a decided slowing in the economy as inventories are building faster than sales.
Record declines in construction spending, new and existing home sales. All pointing towards what may not be a happy ending for all concerned as the Q3 GDP estimate reflects.
Auto & Truck Sales Nov. Ford -9.6%; GM +5.8%; Chrysler +4.7%; Toyota +15.9%
Initial Claims +34K @ 357K the highest level in the last year. Continuing cliams +45K @ 2.48M
Chicago PMI Nov 49.9 vs prior 53.5
Inside the number: the lowest level since Mar 01 and indicative of a contraction in the Chicago area.
Employment down to 49.4% from 57.0%, Prices paid down to 60.2% from 62.5%, New orders down to 52.0% from 54.1%, Inventories down to 57.7% from 67.2%.
ISM Index Nov 49.5 vs prior 51.2 Full Report
Inside the number: the 3rd straight decline showing an economic weakening as inventories are growing faster than sales.
New orders fell to 48.7 from 52.1%. Production fell to 48.5% from 51.9%. Employment fell to 49.2% from 50.8%. Prices paid rose to 53.5% from 47.0%. Inventories rose to 49.7% from 49.4%.
Durable Orders Oct -8.3% vs prior +8.7% Full Report
Inside the number: the largest drop in 6 years on a steep plunge in new orders for civilian aircraft -44.5%.
Weak demand for electronics -10.2%, defense goods -42.1% and fabricated metals -2.5%. Excluding transportation goods, orders -1.7%. Excluding defense goods, orders -6.4%, the largest decline in 4 years.
Bad news for tech, orders for computers -25.2%, the third lowest level in 13 years. Shipments of computers were at the lowest level since the data were first collected in 1992.
Core capital goods orders -5.1% causing concern for a deeper and broader economic slowing.
Construction Spending Oct -1% vs prior revised downward -0.8%
Inside the number: Private residential construction spending-1.9% vs prior -1.4%, the 7th consecutive and longest decline on record.
New Home Sales Oct -3.2% @ 1M Full Report
Inside the number: New home sales are -25.4% in the past year and sales of houses priced less than $200,000 (affordable) were -16%.
Existing Home Sales Oct +0.5% @ 6.24M vs prior 6.21M Full Report
Inside the number: The NAR tried to put a positive spin on the 1st increase since Feb.
However, YOY Sales -11.5%, and inventories of unsold homes +1.9% to 3.854M, a 7.4-month supply at the October sales rate. It's the largest supply since April 1993.
Worse yet, Median Sales Price YOY -3.5% @ 221K, the 1st time in history that prices have fallen 3 straight months and the largest decline ever recorded.
GDP-Prel. Q3 +2.2% vs prior +2.6% Full Report
Inside the number: Because much of the upward revision was due to inventory growth, the implications for Q4 growth could be negative.
YOY Profits +30.9%, the fastest growth in 22 years. Real disposable incomes -1.5% in Q2 as opposed to the +1.7% previously reported. Unit labor costs have not risen as fast as assumed and therefore workers have less money to spend.
Meanwhile stagflation still taking its toll, the core PCE price index -0.2% to +2.2%, and holding steady YOY at +2.4%.
Slowing housing market impact? Residential investment -18%, marking the largest decline in 15 years. Home building cut 1.2% points from GDP growth.
We shudder to think how bad this picture will look in another year as there is a large latency in the GDP and actual spending numbers.
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