Economic Reports 02/07/09
Further downside risk?? IMF Managing Director Dominique Strauss-Kahn:
Advanced economies are already in a "depression" and the financial crisis may deepen unless the banking system is fixed....
The worst cannot be ruled out. There’s a lot of downside risk...
No Sacred Cows... The U.S. Postal Service said it plans to trim headcount through attrition and early retirement,
and has asked lawmakers to allow it to reduce its six-days-a-week delivery schedule to pare expenses.
Where the rubber meets the road... For-hire trucking companies decreased payrolls by 24,900 in January...
which was the tenth consecutive drop and the largest month-to-month decline since April 1994.
Since the start of the current recession in December 2007, motor carriers have cut employment by 106,100.
Personal Income & Spending Dec. Personal income -0.2%, following a 0.4% fall in November. Year on year, personal income growth declined to up 1.4% from up 2.1% in November.
Consumer spending continued to retreat, plunging 1.0% after a 0.8% drop the prior month.
Personal consumption has declined for six months in a row. Yoy double digit stagflation shows with a +3.6% increase in spending.
Household purchases fell more than 3% at an annual rate in the past two quarters, the first time that’s happened since at least 1947.
Constructon Spending Dec. Construction outlays -1.4% vs -1.2%. A sharp 3.2% plunge in private residential outlays coupled with -8.1% Private SFR outlays.
Worse yet, Yoy Private -7.6%; Private Residential -22.9%; Private SFR -43.1%
ISM Manufacturing Jan 35.6 vs 32.4 Good news? new orders rose to a weak 33.2 from dismal 23.1.
The December report all 18 industries in the report showed contraction while January saw two industries rebound.
Bad news? The employment index did not improve, holding unchanged at a 29.9 level that points squarely at continued and severe payroll contraction for the manufacturing component.
ADP Employment Jan called for a 522,000 drop in private payrolls for Friday's employment report. Dec losses revised up to -659K. Large business -92K; medium -255K; small -175K.
Sharply falling employment at medium- and small-size businesses clearly indicates that the recession continues to spread well beyond manufacturing and housing-related activities.
Non farm private service sector employment -279K; goods producing -243K; the 24th consecutive month of decline. Manufacturing -160K; declining 28 of 29 months; construction -83K; 22 months of decline.
ISM Services Jan 42.9 vs 40.6 Good news? new orders rose to 41.6 while business activity, akin to a production index, rose more than 5 points to 44.2.
Bad news? Destocking is still the theme with the inventories index falling 7-1/2 points to 41.5.
A big negative in the report was a 1 tenth downtick in the employment index to an extremely weak 34.4.
Continued destocking and continuing contraction in new orders do not point to recovery anytime soon for job demand.
Initial Claims Jan 31st +35K at 626K; 4 week MA +40K at 582.25K; Continuing unemployment +20K at 4.788M; both records since the early 80's and confirming acute contraction in the labor market.
Q4 Productivity +3.2%; the good news? a large improvement vs +1.5% in Q3.
The bad news? The data clearly reflect the acceerated downsizing in the labor markets and point to a consumer sector that is in a very defensive position.
Factory Orders Dec -3.9% vs -6.5% Durable goods -3%; Autos -5.7%; non durable goods -4.8%.
Orders to U.S. factories are down 18.7% from December 2007, the largest year-over-year reduction on record dating back to 1992.
Factory orders are buckling, cumulatively, factory orders have plunged 21.7% since July 2008...
pointing to greater declines in shipments and greater contraction in payrolls.
Non Farms Payrolls Jan -598K vs -577K; Unemployment rate 7.6% vs 7.2%.
The largest monthly drop since 1974; 13 consecutive months of decline led by goods-producing sector which shed 319K.
Manufacturing and construction -207K and -111K; Service sector also fell sharply –279K with the largest job losses seen in professional & business services, down 121K, and in trade & transportation, down 118K.
The Nattering One muses... The report indicates that businesses are engaging in wholesale job cuts.
This is likely to lead to further spending cutbacks by consumers which portend further economic contraction ahead.
The 3.57 million jobs lost since the recession started in December 2007 marks the biggest employment slump of any economic contraction in the postwar period.
Echoing the Naybobs previously stated sentiments: Nariman Behravesh, chief economist at IHS Global Insight:
"We’ll probably see job losses of another 2 million to 3 million before this is over."
On Friday, ebullient, clueless and elated investors with hookas; bongs and crack pipes in hand, sent the DJIA up 217 on the dismal news.
Advanced economies are already in a "depression" and the financial crisis may deepen unless the banking system is fixed....
The worst cannot be ruled out. There’s a lot of downside risk...
No Sacred Cows... The U.S. Postal Service said it plans to trim headcount through attrition and early retirement,
and has asked lawmakers to allow it to reduce its six-days-a-week delivery schedule to pare expenses.
Where the rubber meets the road... For-hire trucking companies decreased payrolls by 24,900 in January...
which was the tenth consecutive drop and the largest month-to-month decline since April 1994.
Since the start of the current recession in December 2007, motor carriers have cut employment by 106,100.
Personal Income & Spending Dec. Personal income -0.2%, following a 0.4% fall in November. Year on year, personal income growth declined to up 1.4% from up 2.1% in November.
Consumer spending continued to retreat, plunging 1.0% after a 0.8% drop the prior month.
Personal consumption has declined for six months in a row. Yoy double digit stagflation shows with a +3.6% increase in spending.
Household purchases fell more than 3% at an annual rate in the past two quarters, the first time that’s happened since at least 1947.
Constructon Spending Dec. Construction outlays -1.4% vs -1.2%. A sharp 3.2% plunge in private residential outlays coupled with -8.1% Private SFR outlays.
Worse yet, Yoy Private -7.6%; Private Residential -22.9%; Private SFR -43.1%
ISM Manufacturing Jan 35.6 vs 32.4 Good news? new orders rose to a weak 33.2 from dismal 23.1.
The December report all 18 industries in the report showed contraction while January saw two industries rebound.
Bad news? The employment index did not improve, holding unchanged at a 29.9 level that points squarely at continued and severe payroll contraction for the manufacturing component.
ADP Employment Jan called for a 522,000 drop in private payrolls for Friday's employment report. Dec losses revised up to -659K. Large business -92K; medium -255K; small -175K.
Sharply falling employment at medium- and small-size businesses clearly indicates that the recession continues to spread well beyond manufacturing and housing-related activities.
Non farm private service sector employment -279K; goods producing -243K; the 24th consecutive month of decline. Manufacturing -160K; declining 28 of 29 months; construction -83K; 22 months of decline.
ISM Services Jan 42.9 vs 40.6 Good news? new orders rose to 41.6 while business activity, akin to a production index, rose more than 5 points to 44.2.
Bad news? Destocking is still the theme with the inventories index falling 7-1/2 points to 41.5.
A big negative in the report was a 1 tenth downtick in the employment index to an extremely weak 34.4.
Continued destocking and continuing contraction in new orders do not point to recovery anytime soon for job demand.
Initial Claims Jan 31st +35K at 626K; 4 week MA +40K at 582.25K; Continuing unemployment +20K at 4.788M; both records since the early 80's and confirming acute contraction in the labor market.
Q4 Productivity +3.2%; the good news? a large improvement vs +1.5% in Q3.
The bad news? The data clearly reflect the acceerated downsizing in the labor markets and point to a consumer sector that is in a very defensive position.
Factory Orders Dec -3.9% vs -6.5% Durable goods -3%; Autos -5.7%; non durable goods -4.8%.
Orders to U.S. factories are down 18.7% from December 2007, the largest year-over-year reduction on record dating back to 1992.
Factory orders are buckling, cumulatively, factory orders have plunged 21.7% since July 2008...
pointing to greater declines in shipments and greater contraction in payrolls.
Non Farms Payrolls Jan -598K vs -577K; Unemployment rate 7.6% vs 7.2%.
The largest monthly drop since 1974; 13 consecutive months of decline led by goods-producing sector which shed 319K.
Manufacturing and construction -207K and -111K; Service sector also fell sharply –279K with the largest job losses seen in professional & business services, down 121K, and in trade & transportation, down 118K.
The Nattering One muses... The report indicates that businesses are engaging in wholesale job cuts.
This is likely to lead to further spending cutbacks by consumers which portend further economic contraction ahead.
The 3.57 million jobs lost since the recession started in December 2007 marks the biggest employment slump of any economic contraction in the postwar period.
Echoing the Naybobs previously stated sentiments: Nariman Behravesh, chief economist at IHS Global Insight:
"We’ll probably see job losses of another 2 million to 3 million before this is over."
On Friday, ebullient, clueless and elated investors with hookas; bongs and crack pipes in hand, sent the DJIA up 217 on the dismal news.
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