Archive for the ‘Philly Fed’ Category
Unemployment Claims: Back To Reality?
In the week ending February 16, the advance figure for seasonally adjusted initial claims was 362,000, an increase of 20,000 from the previous week’s revised figure of 342,000. The 4-week moving average was 360,750, an increase of 8,000 from the previous week’s revised average of 352,750.
The advance number of actual initial claims under state programs, unadjusted, totaled 346,428 in the week ending February 16, a decrease of -14,758 from the previous week. There were 346,659 initial claims in the comparable week in 2012.
So we have a reasonable actual .vs. “adjusted” number — heh, look at that!
What’s the big table look like?
Interesting — the EUC rolloff continues, now under 2 million total. This is very significant, but note carefully that there is yet to be any evidence that these “newly not-drawing-UE folks” are getting jobs. That, in turn, should be expected to show up in retail spending over the next few months, and not in a good way either.
But this week, which was the first post the February employment report, did show a nearly 77,000 drop in regular claim participants.
Call it a mixed bag with a mild positive bias for today.
CPI (Consumer Price Index): Some Like It Hot(ter)
The Consumer Price Index for All Urban Consumers (CPI-U) was unchanged in January on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 1.6 percent before seasonal adjustment.
The index for all items less food and energy increased 0.3 percent in January. This increase offset another decline in the gasoline index and resulted in the seasonally adjusted all items index being unchanged, as it was last month. Increases in the indexes for shelter and apparel accounted for much of the increase in the index for all items less food and energy, with advances in the indexes for recreation, medical care, and airline fares also contributing.
That woud be a 3.66% annualized increase in core, which ought to perk up your ears.
Let’s have a look inside at annualized increases, as we did with the PPI.
The first thing that stands out is that the “target” is “achieved” at a 1.9% core rate annualized. But….
Shelter, particularly rent, is up closer to 3% while hospital services are up 4.7% and transportation is also up 3%, with insurance up nearly 5%. The latter is a big perverse effect of QE, in that insurance companies make a fair bit of their money off fixed-income investments. That’s dead, of course.
If you like to eat, eat lamb. It’s down 15% on the year.
Don’t eat apples. They’re up 11%. Fruits in general are up 4.6%, and vegetables 3.4%.
Electronics continued their dive, with TVs off 17% on the year. Americanus Boobus has his idiot box for another year at an ever-lower price.
Don’t go to college unless you want a textbook shoved up your butt. Their price is up 8% on the year, and the best part of it is that your professor is probably getting a piece of it. That smile on his face? It’s because he’s assaulting you coming and going.
Computers continue their inexorable decline, as do other consumer information items (e.g. cell phones, tablets, etc.) Bye-bye margins.
And don’t start this crap about how “health costs” have “leveled out.” The hell they have. Health insurance is up 8.6% annualized, damned close to the 9% escalation that has been maintained historically over the last 30 years. If you believe that it comprises only 0.658% of the total amount of money you spend as a consumer, which is what the government claims, then you’re dumber than a box of rocks.
Can’t afford a car and need to ride the bus? That’s up considerably more than the so-called “inflation index.” Oh, and that’s a laugable 0.264% of your budget too. Really, for those who actually use it?
Those are the lowlights — enjoy.
Philly Fed: Now You’re F*ed
The survey’s broadest measure of manufacturing conditions, the diffusion index of current activity, decreased from a reading ]5.8 in January to ]12.5 this month (see Chart). The demand for manufactured goods also showed slight declines this month: The new orders index declined from a reading of ]4.3 in January to ]7.8 in February. Despite negative readings for general activity and new orders, the shipments index showed improvement: The index remained positive and edged slightly higher to 2.4. The percentage of firms reporting increased shipments (25 percent) was slightly greater than the percentage reporting declines (22 percent).
That’s not good.
There was a small indication of stability — the number of employees basically was flat and the workweek only declined slightly. But….. there is no unfilled order backlog, new orders are declining faster, inventories are drawn down materially below the flat-line and the price paid/received spread is still the wrong way.
These indices have been screaming recession incoming for the last six months. That’s the average lead time — which means it’s here and now, and there are no policy steps remaining available to counteract it as Congress, instead of rationalizing fiscal policy three years ago has instead chosen to “support” phantom and fraudulent “demand” with deficit spending.
Buckle up and keep in mind the average declines in the market during a serious (and severe) recession when there are no effective policy tools available to attempt to counteract it.
Three months a recession call does make, and as I predicted we were going to get that third month.
Firms responding to the July Business Outlook Survey continued to report weak business conditions. Although the survey’s indicators for general activity, new orders, and shipments improved from June, they remained negative this month, suggesting overall declines in business. Firms also reported declines in employment this month and shorter work hours. The manufacturers reported near]steady input and output prices this month. The survey’s indicators of activity over the next six months remained positive but moderated somewhat from June.
The big table says….
The most-important aspect of this report is that employees went negative. These are diffusion indices so a negative print (but less-negative) is a change in the rate of deterioration but not in the direction of movement.
Workweek tends to lead employment, and at the point that employment turns it’s too late to prevent the economic impact from broadening and turning into recession.
Here it comes; the “official call” will probably show up in November or December — four months or so after hits you.
So why didn’t the market dive? It expects more Fed heroin. But whether that comes or not won’t matter; remember that we currently are “under the influence” of Fed games and yet the numbers, as shown here, just plain suck.
Discussion (registration required to post)
Jobless Claims 4/19: Oops
In the week ending April 14, the advance figure for seasonally adjusted initial claims was 386,000, a decrease of 2,000 from the previous week’s revised figure of 388,000. The 4-week moving average was 374,750, an increase of 5,500 from the previous week’s revised average of 369,250.
“But it went down!” I hear you say. Uh, no. The revisions folks, the revisions. Again.
There’s nothing good here; this looks like yet another train wreck and shows that job “creation” is at best tepid and might be turning negative.
There is however, one interesting thing in the big table — and note that this is in last month’s numbers:
That regular drop is definitely something to take note of. We’ll see if that’s a one-off or an actual meaningful change…… there have been a number of drops in that figure of late, so it cannot be ignored without further evidence that it is an anomaly.
Philly Fed – Softening
Manufacturing firms responding to the April Business Outlook Survey indicated that regional manufacturing activity expanded modestly this month. The survey’s broad indicators for general activity, new orders, and shipments all remained positive but fell slightly from their readings last month. The indicator for current employment, however, showed a notable improvement. Price pressures were only slightly more widespread this month. The survey’s broad indicators of future activity remained at relatively high readings, and firms were more optimistic about their plans for hiring over the next six months.
Yeah, ok. Nice try.
The diffusion index came in at 8.5, down from 12.5 last month. New orders and shipments were both down, unfilled orders (backlog) was an outlier and showed build, inventories were up (a lot) and prices paid were also up (not so good), far more than prices received (very bad.)
More ominously while hiring took place employee workweek contracted. That implies overshoot in the activity by employers, which is very bad on a forward basis.
In the week ending September 10, the advance figure for seasonally adjusted initial claims was 428,000, an increase of 11,000 from the previous week’s revised figure of 417,000. The 4-week moving average was 419,500, an increase of 4,000 from the previous week’s revised average of 415,500.
Oh look, it’s going up again! What do we blame this time? I’m sure we can find something….. (How about “Your policies suck Mr. President and Congress?”)
There’s nothing worthwhile in the extended claims data – the total dropped by 25,000 in the August 27th week, but the increases the last couple of weeks are not yet in these numbers. They will be, but not until we get right up against the employment report for September.
Note that with the claims numbers we’re seeing and the trend direction the risk of a negative September NFP report is climbing fast. If you’re wondering what’s feeding the panic level in Obama’s White House with his “jobs” bill look no further than this series.
What’s the “misery index” again? I seem to remember it being 12-month chained inflation and unemployment. Well?
The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.4 percent in August on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 3.8 percent before seasonal adjustment.
But but but…. there’s no inflation, right?
The index for all items less food and energy increased 0.2 percent in August, the same increase as the previous month. Shelter and apparel were the biggest contributors, though the indexes for most of its major components posted increases, including used cars and trucks, medical care, household furnishings and operations, recreation, tobacco, and personal care. The new vehicles index, unchanged for the second month in a row, was an exception.
The “but it’s all energy prices and they’re volatile” excuse is long in the tooth and running out of gas. That dog won’t hunt any more folks….
The energy index has risen 18.4 percent over the last year, while the food index has increased 4.6 percent.
Of course Senior Citizens who were prudent and saved don’t have a problem with this, right? After all they don’t need to buy food or energy… and neither does anyone else…. right?
This doesn’t disproportionately hit the lower class and working poor, does it? I mean, food and energy aren’t a disproportionate amount of their spending, are they?
There are some big numbers in the tables – of note are virtually everything food-related, up 4% or better across the board with some things such as meats and dairy up 8 and 9% respectively. Fuel oil was up a stunning 27%, water and sewer services up nearly 5%, apparel up 4% and private transportation costs up an eye-popping 12% – with public transport costs skyrocketing as well (7.2%).
Hospitals jacked people for 6.2% more while higher education screwed you to the tune of 4.4%.
These are annualized changes (from August 2010) and put into stark relief exactly what sort of squeeze has been felt by the common person. Everyone loves to talk about “oh it’s 0.2% this month” but few will go back and look at who this hits and how hard – and how it all looks on a annualized basis.
When you look at the monthly change in these categories you find no joy either. Monthly change on food was 0.6; annualized that’s 7.4%. Apparel was up 2.3% last month, which you better hope doesn’t continue (as it’s an annualized rate of change of 31%!) Both private and public transport, thank God, did level off this last month.
In short while the inflation trend may be slowing down for the lower class and working poor the damage has already been done.
Make sure you thank Ben and Obama.
The Empire State Manufacturing Survey indicates that conditions for New York manufacturers worsened for a fourth consecutive month in September. The general business conditions index inched down one point, to -8.8. The new orders index held steady at -8.0, while the shipments index dropped sixteen points to -12.9. The inventories index, negative for a third month in a row, fell to -12.0—a sign that inventories continued to decline. After dropping significantly over the summer, the indexes for both prices paid and prices received climbed several points, suggesting that the pace of price increases picked up. Employment indexes were below zero, indicating that employment levels and hours worked fell over the month.
In other words it all sucks, basically - while prices are picking up again into collapsing demand.
What’s worse is that the forward expectations for employment are now zero (no growth) and for the workweek are negative for the second month in a row. This is a seriously bad indication of forward economic activity, and comes into major softening in the other regional indices.
We’re rapidly piling up the “recession” indicators, exactly as I expected would happen a year ago when the PPI changes started to come into the focus.
Brace for the impact folks – this ride is going to get very rough in the terms that matter the most to you – jobs.
When you get a crap number and the market goes up you know the expectation was “Armageddon.”
Responses to the Business Outlook Survey this month suggest that regional manufacturing activity is continuing to contract, but declines are less widespread than in August. The survey’s broad indicators for activity, shipments, and new orders all remained negative for the second consecutive month. Responding firms, however, indicated that employment was slightly higher this month. The broadest indicator of future activity remained positive and rebounded this month, suggesting that recent declines are not expected to continue over the next six months.
Eh, I’m not impressed.
One good numbers in there – the employees number stopped falling apart. But – the workweek did not, which makes one wonder whether seasonal factors are involved in this more than anything else. I cannot get excited about alleged “stabilization” in employment in that survey with hours worked declining as that directly contradicts the alleged improvement in the employee numbers.
Responses to the Business Outlook Survey this month suggest that regional manufacturing activity has dipped significantly. The survey’s broad indicators for activity, shipments, and new orders all declined sharply from last month. Firms indicated that employment and average work hours are lower this month. Price indexes continued to show a trend of moderating price pressures. The broadest indicator of future activity also weakened markedly, but firms still expect overall growth in shipments, new orders, and employment over the next six months. The collection period for this month’s survey ran from August 8-16, overlapping a week of unusually high volatility in both domestic and international financial markets.
The survey’s broadest measure of manufacturing conditions, the diffusion index of current activity, decreased from a slightly positive reading of 3.2 in July to -30.7 in August. The index is now at its lowest level since March 2009 (see Chart).
This resulted in an immediate dive in the market, which was already down 300+, to more than -450.
The fraud and phony games are over.
The “Tea Party” claims to have taken the high ground. They’re lying.
All I hear is Bachmann and others wrapping themselves in the “cause of the day” but failing to stop it, and the idea that somehow “Guns, Gays and God” will carry the day or that we should have “Dominionism” in the Federal Government is an outrage. That’s utter and complete bullshit; having “dominion” over a smoking crater will be cold comfort in January of 2013.
Where the hell were these people in 2008? Where were they in 2009? Where was the attempt to stop Bush, Paulson or Kanjorski? Oh I know, they were all elected in 2010. Ok, it’s 2011 now and I’ll give you the benefit of the doubt in that you can’t do anything until you get into office (despite, I note, your utter refusal to run on these issues in 2010 – I did call you all out on that) so let’s start there.
Has anyone heard any demands to lock up the fraudsters stealing homes with fraudulent documents? To break up the “too big to fail” banks and toss their executives in prison where they belong? To put a stop to the fraudulent issuance of credit economy-wide? To take Bernanke out behind the woodshed and stuff a sock in his mouth via adding an “or else” to The Federal Reserve Act so that he cannot debase the currency and he and his cohorts will all be imprisoned (or hang on The Mall, which seems more appropriate to me) if they do? To enforce a zero-inflation mandate? To end ZIRP and distortions in the bond market? To balance the budget right damn now, and quit playing Ponzi with the Federal Budget, Medicare, Medicaid, Student Loans and more? To tell the truth to our Seniors and everyone else – you will NOT GET what you were promised, because YOU CAN’T – the money does not exist!
You have not heard any of this. Not one damn word.
Oh sure, there are the token claims, such as those from Southerland and Bachmann. That’s very nice, but it’s both insufficient and immaterial. Without legislation and regulation, which means punishment for those who have screwed the American public serially for 30 years none of this will change and you will keep getting bent over the table and serially violated.
Unfortunately for Congress it’s too damn late now. In 2007 I faxed a letter to all 535 members of Congress. I urged them to set aside a couple hundred billion dollars – cash, not bogus credit – to provide “three hots and a cot” for up to 25% of the population for a period of at least one year. NOT subsidy via unemployment, food stamps or any such thing. A soup line, a bunch of cots in formerly-closed military base hangers and barracks, and a place to take a shower and a crap. One quarter – or less – than what we would spend now on the same thing. This would have allowed the housing market to collapse and subsequently clear, the banks would have blown to bits, but from the rubble entrepreneurs would have started new banks, houses would have been resold into the market to new owners and the economy would have cleared the bad debt on its own through bankruptcy and liquidation, which is the essential purpose of recession.
I was not only ignored I was called a lunatic and crazy, that things couldn’t get that bad.
Then 2008 happened and some eyes opened – a bit, because it sure looked like it might get that bad. The response? More fraud.
By 2009 the callers of “fool”, “lunatic”, “haha” and “clown” began again.
Well, how’s it look now folks?
Need it in pictures? Here it is:
Gee, almost back to the depths-of-hell 2009 lows, eh? So what’s this crap about “no recession”?
Oh wait – there’s no recession: This is a continuing Depression that our government, conspiring with the banksters and media, have intentionally and fraudulently covered up and it is no longer working.
Did you get back into the market America?
More to the point if you did get back in: Did you get out in time this time around or were you listening to “Tout TV” again?
Gee, all bad numbers in that table on the current situation. New orders collapsed by twenty-six points, shipments collapsed by almost ten points, and both employee count and workweek collapsed by nearly 14 and 9 points, respectively.
Worse, on a forward basis inventories, delivery times, unfilled orders and the employee workweek collapsed on a six-month forward look, with employment numbers remaining only mildly positive.
This means that personal income is going to collapse as well and with it tax receipts, exactly as I have forecast. The government’s revenue forecasts, to be blunt, are screwed.
To our government: Either get your arms around this now and consolidate, meaning massive cuts in spending and a fundamental reorganization of tax and trade policy (and no, not more “free trade” either), or we will go “overcenter” on that nasty little debt table I’ve been talking about – at which point there will be nothing you can do about it.
The Philly Fed Current Business Outlook Survey came out at a print of 35.9 compared to 19.3 before, and expectations of 21.0. This print is the highest reading since January 2004. Yet the only component metric that matters is, you guessed it, the Prices Paid index, which came at a ridiculous 67.2 from 54.3 previously! The prices paid index, which increased 13 points in February, has now increased 55 points over the past five months. And confirming the crush in margins was the in the prices received index which tacked on a barely notable 3.9 points to 21. The Prices Paid less Prices Received spread is the highest since 1979! It is time for the sellside clown brigade to start lowering margins with gusto.
From the report:
The survey’s broadest measure of manufacturing conditions, the diffusion index of current activity, increased from 19.3 in January to 35.9 this month. This is the highest reading since January 2004 (see Chart). The demand for manufactured goods is showing continued strength: Although the new orders index was virtually unchanged in February, it has increased over the past six months. The shipments index also improved markedly, increasing 22 points. Firms also reported a rise in unfilled orders and longer delivery times this month.
On margin deterioration:
Price increases for inputs as well as firms’ own manufactured goods were more widespread again this month. Sixty?seven percent of the firms reported higher prices for inputs, compared with 54 percent in the previous month. The prices paid index, which increased 13 points in February, has now increased 55 points over the past five months. On balance, firms also reported a rise in prices for their own manufactured goods. The prices received index increased 4 points and has steadily increased over the past four months. Twenty?nine percent of firms reportedhigher prices for their own goods this month, compared to 26 percent in January.
And the margin grim reaper: Prices Paid less Prices Received - highest since 1979.
And once gross margins go, EPS is next to follow.