Economic Reports 08/17/09

Import & Export Prices July

Export -0.3%; Yoy -8.1%; Import -0.7%; Yoy -19.3%. Lower demand begets pricing weakness and deflation.

CPI July

Flat; Core +0.1% less travelers means larger hotel discounts which pulled the latest housing away from home number down.

States keep raising tobacco taxes to boost revenues and that was reflected in a 2.2% jump in tobacco & smoking products for the month.

Business Inventories June

-1.1%; Destocking continues at an uninterrupted pace, a trend that may soon shift from being a positive for the economy to being a big negative -- especially for jobs.

Improvement in manufacturing and improvement in housing have raised hopes that economic recovery is nearing, but the nation's businesses are definitely not banking on it…

instead they continue to destock at an aggressive pace which means continued shutdowns through the supply chain and no let up in related job losses.

Industrial Production July

+0.5%; Capacity Utilization 68.5% vs 68% a surprise increase on the back of motor vehicles & parts which jumped 20.1%.

Manufacturing ex autos rose 0.2% with Yoy Industrial production down 13.1%.

Productivity and Costs Q2:09

Productivity +6.4% vs +1.6%; Unit labor costs -5.8% vs +3%. Millions of layoffs have increased productivity and reduced labor costs.

The jump in productivity and drop in unit labor costs were due to hours worked falling much faster than output.

Hours worked plunged an annualized 7.6% while output edged down 1.7%.

Wholesale Trade June

Inventories -1.7%; Sales +0.4%; wholesalers, as well as businesses throughout the supply chain...

show no indication that they're ready to slow destocking let alone begin restocking.

The inventory correction continues as firms try to realign their cost structure to a lower baseline of demand.

International Trade June

-$27B vs -$26B goods excluding petroleum gap shrank significantly to $20.0B from $22.6B. Exports have been boosted by a weaker dollar.

However, businesses apparently are still concerned about domestic demand as they have cut back on nonoil imports.

Outside of oil, the import numbers show weak domestic demand.

Imports were almost entirely boosted by the industrial supplies category which jumped $3.9B and includes oil imports.

Businesses are not adding to stockroom shelves-at least not from imports. Consumer goods imports dropped a sizeable $1.7 billion and capital goods imports were down.

Year-on-year, overall exports slipped to minus 22.2% while imports were little changed at down 31.1% Yoy.

Initial Jobless Claims 08/08

+4K at 558K; 4 week MA +8.5K at 565K; Continuing claims -141K at 6.202M; 4 week MA -27K at 6.259M.

A brief respite, soon to resume its downward trek to new record depths.

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