Economic Reports 07/13/07

Summary: Mich Sentiment-Prel. Jul 92.4 vs prior 85.3 as ebullient investors rejoice while ignoring whats going on behind the curtains.

Business inventories showing classic channel stuffing to cook the books, as sales are negative and inventories are building at the retail and manufacturing levels.

Retail sales declining as John Q pulls back and confirming the business inventories retail woes.

Import & Export Prices showing stagflation in its full glory as demand dwindles.

Business Inventories May +0.5 vs prior +0.4%
Full Report

Inside the number: Inventories Yoy +4%; Manufacturers +0.3% vs +0.4% Yoy +4.3%; Retailers +0.6% vs +0.3% Yoy +1.6%; Merchant Wholesalers +0.5% vs +0.3% Yoy +6.7%

Total Sales +1.3% vs +0.7% Yoy +4%; Manufacturers +1% vs +1% Yoy -0.4%; Retailers +1.6% vs -0.4% Yoy +4.9%; Merchant Wholesalers +1.3% vs +1.5% Yoy +8.7%

Stuck on the floor... department store $ sales are down Yoy while inventories of clothing +8.8% & general merchandise +6.6% are building.

And stuck in the gate... Manufacturing Yoy Inventories +4.3%; Sales -0.4%.

Retail Sales Jun -0.9% vs prior +1.5%
Full Report

Inside the number: A broadbased decline, the largest since Aug 05 on weak demand for durable goods.

Department stores -1% vs +1.3% Yoy -2.1%. Retail & Food Services Yoy +3.8% (not adjusted for price changes).

Retail trade sales -1% vs +1.6% Yoy +3.5%. Retail Sales ex-auto Jun -0.4% vs +1.6% Yoy +4.2%.

Auto & parts sales -3.1% vs +1%; Furniture -3% vs +0.3%; Building supplies -2.3% vs +4.7%; Electronics -1.4% vs +1.1%; Clothing -1.4% vs +2.5%

Export Prices Jun +0.3% vs prior +0.2% Yoy +4.1%
Full Report

Inside the number: ex-ag +0.1 vs prior +0.2%; Yoy +2.9%. Ag +2.9 vs prior +0.1%; Yoy +18.5%.

Import Prices increase for the 5th straight month;+1% vs prior +1.1% Yoy +2.3% ; ex-oil +0.2% vs prior +0.5% Yoy +2.6%; oil +4.7% vs prior +3.7% Yoy +2.1%.

Yoy Import: Vegetables +23.4%; Inorganic Chemicals +33.8%; Iron & Steel +19.2%

Yoy Export: Vegetables +21.7%; Animals +22.5% Woodpulp +16.2%; Precious metals +15%; Cereals +30.9%; Iron & Steel +16.8%

Whats wrong with these two pictures and what does it tell us?

#1 The cost of industrial supplies are up, yet the price of the exported durables is down.

Import: Yoy industrial supplies non durable ex-oil +8.4%. Export: durables -0.5%; Yoy industrial supplies durable +10.1%.

#2 The cost of air fares rising, yet air & oceanliner freight prices falling.

Import: air fares +13.4%, Yoy +5.8%, yet import air freight -2.1% and oceanliner freight -2.1%.

Answer: dwindling domestic & overseas demand.

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