Economic Reports 07/20/09

TIC May

-$19.2B as net foreign purchases of long-term U.S. securities fell steeply, eflecting foreign selling of U.S. Treasuries, a net $8.8 billion.

Net flows, which include short-term securities, fell $66.6 billion vs. April's decline of $38.0 billion...

which may raise questions over foreign commitment to U.S. securities.

PPI June

+1.8%; Yoy -4.7%; Core PPI +0.5%; Yoy +3.4%. The perfect storm with Energy +6.6%; reflecting stagflation in the Core and deflation on the whole.

CPI June

+0.7%; Yoy -1.2%; Core +0.2%; Yoy +1.7%. Gasoline +17.3% and in line with the PPI.

Retail Sales June

Good news? +0.6%. June’s sequential increase reflected volatile sales at motor vehicle dealerships (+2.3%) and a 5% jump in sales at gas stations, which was mainly due to a surge in gasoline prices.

Bad news, outside of gasoline and motor vehicles, sales were mixed but mostly down.

Excluding those two categories, retail sales actually contracted 0.2%.

Building materials & garden equipment -0.9%. Consumers are eating at home more as food services & drinking places also declined 0.9%.

On a year-over-year basis, total retail sales were down 9% which was the tenth consecutive year-earlier reduction.

Business Inventories May

-1% as destocking continues. It is evident that inventories (relative to sales) are still extremely bloated.

As a result, transport volumes will remain sluggish as the inventory correction continues.

Empire State Manufacturing July

-0.55 vs -9.4; an improvement, but still contracting. Shipments went positive 10.97 vs -4.84 as destocking continued with inventories at -36.48 vs -25.29.

Prices paid jumped 10.42 vs -5.75 reflecting more than just rising energy costs.

Thin inventories are not a vote of confidence in the outlook but will help limit future layoffs as demand for future goods will have to be met by production.

Philly Fed July

-7.5 vs -2.2, the opposite direction of the Empire state. New orders improved slightly, however prices received and employment both fell.

Industrial Production June

-0.4% as manufacturing output (-0.6%) fell for the seventh time in eight months. Consequently, production is currently at its lowest level since July 1998.

Production of durable goods -0.7% while nondurable goods production -0.4%.

Capacity utilization fell again to a new record low at 68% vs 68.3%; meaning 32% of all capacity is idled.

Compared with June 2008, manufacturing output plunged 15.4%, which marked the largest Yoy contraction in the history of the index (dating back to 1972).

Initial Jobless Claims July 11

-47K at 522K; 4 week MA -22.5K at 584.5K; Continuing claims -642K at 6.273M; 4 week MA -110K at 6.666M.

A shorter work week and seasonal adjustments caused the improvement as the number of actual claims filed increased by 86K with continuing claims +64K.

Housing Market Index July

17 vs 15; credit flow is still tight, but lower prices are helping improve traffic.

Housing Starts & Permits

Headline reads a “robust” bounce with total housing starts +3.6% to an annual rate of 582K. Nevertheless, starts Yoy were down a staggering 46%.

SFR starts +14.4%, however, Yoy -28.2%; YTD -43.2%. Permits +8.7%; however Yoy -52%.

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