Economic Reports 05/31/07
Summary: Chicago PMI rebounding like March, however, rising prices, inventories and delivery times are dark clouds in the sky.
Initial claims showing pernicious continuing unemployment and a continuing bleed into the service sector.
GDP estimate falling to its worst level since 2001 and clearly headed for ZERO or negative growth.
Construction spending headline number up, but private residential still shrinking along with the economic engine of the last 5 years - the housing sector.
Chicago PMI May 61.7 vs prior 52.9 Full Report
Inside the number: Good news... Production up 69.8 vs 62.2; new orders up 71.1 vs 56.5; backlogs up 53 vs 48.4; employment up 57.3 vs 50.5
Bad news... inventories up 52.6 vs 43.2; supplier deliveries slowing 45.3 vs 43.3; prices paid up 70.2 vs 64.9.
Select comments: "Our competitive landscape is becoming severe. Pressure to reduce expenses continues unabated."
"In place of a "peace dividend," Iraq is a moral and financial drag on our business."
"From a retail viewpoint sales are down. Customer count is off. High gasoline pricing? Anyone's guess."
"Seems manufacturers are using any excuse they can to increase prices."
"The Supplier Delivery index, below 50 since January, is a cloud in the economic sky".
Initial Claims 05/26 -4K at 310K vs prior 314K Full Report
Inside the number: prior revised up from 311K; 4 week MA +1K at 304.5K; Initial claims Yoy -5%.
Continuing claims -52K at 2.47M; 4 week MA -4.5K at 2.5M; Yoy +2%. Increases greater than 1000:
State Change State Supplied Comment
SC +1,126 manufacturing
AR +1,301 trade and service
MO +3,106 transportation, furniture, service
NC +3,858 transportation equipment, lumber/wood, trade
GDP Prel. Q1 +0.6% vs prior +1.3% Full Report
Inside the number: Weakest Yoy growth since 2002. What ye sow: Gross private domestic investment Q206 +1%; Q306 -0.8%; Q406 -15.2%; Q107 -9.3%.
Ye shall reap: Corporate before tax profits +6.3%, the weakest Yoy growth since 2001.
The stagflation: Chain Deflator Prel. Q1 +4.0% vs prior +4.0%. Advertised inflation running at a 16 year high.
Worse yet: Market PCE Q406 -1.6%; Q107 +3.5%; a swing of 5.1%. Holding true.... % change in PCE of non durable goods +5.1% annualized.
The housing debacle: % change Yoy residential investment Q206 -1.5%; Q306 -8.1%; Q406 -12.8%; Q107 -16.3%.
The growth over the last year has slowed to an average of 1.9%, worse yet...
the composition of GDP has been unfavorable for several quarters. Fed officials think inflation remains a greater risk than recession.
The Nattering One muses... they have been getting small doses of both - its called stagflation.
What will the Fed do when Q2 GDP goes to 0.3 or ZERO? and again when Q3 GDP goes negative?
Construction Spending Apr +0.1% vs prior +0.6% Full Report
Inside the number: Prior revised up 0.4%. Private residential spending falling again -0.9%, offset by non residential spending increase +1.5%.
Yoy private residential spending -14.1%, and now non residential commercial is starting to shrink -3.7%.
The Bottom Line: New SFR's -0.1% and Yoy -25.6%
Initial claims showing pernicious continuing unemployment and a continuing bleed into the service sector.
GDP estimate falling to its worst level since 2001 and clearly headed for ZERO or negative growth.
Construction spending headline number up, but private residential still shrinking along with the economic engine of the last 5 years - the housing sector.
Chicago PMI May 61.7 vs prior 52.9 Full Report
Inside the number: Good news... Production up 69.8 vs 62.2; new orders up 71.1 vs 56.5; backlogs up 53 vs 48.4; employment up 57.3 vs 50.5
Bad news... inventories up 52.6 vs 43.2; supplier deliveries slowing 45.3 vs 43.3; prices paid up 70.2 vs 64.9.
Select comments: "Our competitive landscape is becoming severe. Pressure to reduce expenses continues unabated."
"In place of a "peace dividend," Iraq is a moral and financial drag on our business."
"From a retail viewpoint sales are down. Customer count is off. High gasoline pricing? Anyone's guess."
"Seems manufacturers are using any excuse they can to increase prices."
"The Supplier Delivery index, below 50 since January, is a cloud in the economic sky".
Initial Claims 05/26 -4K at 310K vs prior 314K Full Report
Inside the number: prior revised up from 311K; 4 week MA +1K at 304.5K; Initial claims Yoy -5%.
Continuing claims -52K at 2.47M; 4 week MA -4.5K at 2.5M; Yoy +2%. Increases greater than 1000:
State Change State Supplied Comment
SC +1,126 manufacturing
AR +1,301 trade and service
MO +3,106 transportation, furniture, service
NC +3,858 transportation equipment, lumber/wood, trade
GDP Prel. Q1 +0.6% vs prior +1.3% Full Report
Inside the number: Weakest Yoy growth since 2002. What ye sow: Gross private domestic investment Q206 +1%; Q306 -0.8%; Q406 -15.2%; Q107 -9.3%.
Ye shall reap: Corporate before tax profits +6.3%, the weakest Yoy growth since 2001.
The stagflation: Chain Deflator Prel. Q1 +4.0% vs prior +4.0%. Advertised inflation running at a 16 year high.
Worse yet: Market PCE Q406 -1.6%; Q107 +3.5%; a swing of 5.1%. Holding true.... % change in PCE of non durable goods +5.1% annualized.
The housing debacle: % change Yoy residential investment Q206 -1.5%; Q306 -8.1%; Q406 -12.8%; Q107 -16.3%.
The growth over the last year has slowed to an average of 1.9%, worse yet...
the composition of GDP has been unfavorable for several quarters. Fed officials think inflation remains a greater risk than recession.
The Nattering One muses... they have been getting small doses of both - its called stagflation.
What will the Fed do when Q2 GDP goes to 0.3 or ZERO? and again when Q3 GDP goes negative?
Construction Spending Apr +0.1% vs prior +0.6% Full Report
Inside the number: Prior revised up 0.4%. Private residential spending falling again -0.9%, offset by non residential spending increase +1.5%.
Yoy private residential spending -14.1%, and now non residential commercial is starting to shrink -3.7%.
The Bottom Line: New SFR's -0.1% and Yoy -25.6%
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