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Archive for the ‘Philly Fed’ Category

Unemployment Claims: Back To Reality?

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.

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Jobless Claims 4/19: Oops

There’s no love here.

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

We’re done folks.

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!

No.

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.

ZeroHedge

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