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The Economy Is Schizophrenic
The economy seems indecisive.
Retail sales are OK if you ignore the better data this week was only due to auto sales. Import and export prices are deflating while producer prices jumped up significantly. Industrial production even though improved month-over-month continues on a "less good" trend line - it has broken blow the range it has been in for almost a year. Inflation adjusted wholesale sales is contracting both year-to-date and year-over-year.
And this was just the data from this week. The data over the last few months seems schizophrenic. This certainly is not the best of times or the worst of times.
The Econintersect economic forecast for June 2012 again declined marginally, and remains under a zone which would indicate the economy is about to grow normally. The concern is that consumers are spending a historically high amount of their income.
The ECRI WLI growth index value has been weakly in positive territory for over four months - but in a noticeable positive trend. The index is indicating the economy six month from today will be slightly better than it is today.
Current ECRI WLI Growth Index(click to enlarge)
Initial unemployment claims declined from 346,000 (reported last week) to 334,000 this week. Historically, claims exceeding 400,000 per week usually occur when employment gains are less than the workforce growth, resulting in an increasing unemployment rate (background here and here).
The real gauge - the 4 week moving average - worsened from 352,500 (reported last week) to 345,250. Because of the noise (week-to-week movements from abnormal events AND the backward revisions to previous weeks releases), the 4-week average remains the reliable gauge.
Weekly Initial Unemployment Claims - 4 Week Average - Seasonally Adjusted - 2011 (red line), 2012 (green line), 2013 (blue line)(click to enlarge)
Bankruptcies this Week: Exide Technologies, Privately-held NE Opco (dba National Envelope)
Data released this week which contained economically intuitive components (forward looking) were:
All other data released this week either does not have enough historical correlation to the economy to be considered intuitive, or is simply a coincident indicator to the economy.
Weekly Economic Release Scorecard:Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
Analyzing The Analysis Of The Jobs Report - Garbage In, Garbage Out
I (like every other pundit) pumped out an analysis of Friday's BLS Jobs report - A Relatively Good BLS Jobs Situation in May 2013. The difference between me and other pundits is that I know analyzing garbage data produces garbage, and I try to present the data in a way where a wider perspective of the data will bring the jobs situation into perspective. Analyzing a single month of BLS Jobs data out of perspective makes you dumber.
Why is the data garbage? To produce the information in a timely matter the BLS is forced into extrapolating incomplete data. The data jumps around like grasshoppers. Even something simple like establishing the total private non-farm payroll level becomes garbage when analyzed monthly.
The month-over-month growth is only accurate if you know the total employment for that month - and obviously this seems to be impossible for the BLS to establish in real time.
The Econintersect economic forecast for June 2012 again declined marginally, and remains under a zone which would indicate the economy is about to grow normally. The concern is that consumers are spending a historically high amount of their income.
The ECRI WLI growth index value has been weakly in positive territory for over four months - but in a noticeable improvement trend. The index is indicating the economy six month from today will be slightly better than it is today.
Current ECRI WLI Growth Index(click to enlarge)
Initial unemployment claims declined from 354,000 (reported last week) to 346,000 this week. Historically, claims exceeding 400,000 per week usually occur when employment gains are less than the workforce growth, resulting in an increasing unemployment rate (background here and here).
The real gauge - the 4 week moving average - worsened from 347,250 (reported last week) to 352,500. Because of the noise (week-to-week movements from abnormal events AND the backward revisions to previous weeks releases), the 4-week average remains the reliable gauge.
Weekly Initial Unemployment Claims - 4 Week Average - Seasonally Adjusted - 2011 (red line), 2012 (green line), 2013 (blue line)(click to enlarge)
Bankruptcies this Week: Digerati Technologies, Triad Guaranty, Privately-held iGPS Company,
Data released this week which contained economically intuitive components (forward looking) were:
All other data released this week either does not have enough historical correlation to the economy to be considered intuitive, or is simply a coincident indicator to the economy.
Weekly Economic Release Scorecard:Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
Weekly Economic Review - Deflation Coming To Your Economy?
There was buzz in economic cyberspace over Friday's personal consumption expenditure price index coming in at 0.74% year-over-year. Is deflation around the corner?
Year-over-Year Change - PCE's Price Index (blue line) versus CPI-U (red line) versus GDP Deflator (green line)(click to enlarge)
The six month trend is definitely down heading towards deflation. All this in the face of quantitative easing which the majority believe causes inflation. Consider:
The Econintersect economic forecast for June 2012 again declined marginally, and remains under a zone which would indicate the economy is about to grow normally. The concern is that consumers are spending a historically high amount of their income.
The ECRI WLI growth index value has been weakly in positive territory for over four months - but in a noticeable improvement trend. The index is indicating the economy six month from today will be slightly better than it is today.
Current ECRI WLI Growth Index(click to enlarge)
/images/z weekly_indexes.PNG
Initial unemployment claims rose from 340,000 (reported last week) to 354,000 this week. Historically, claims exceeding 400,000 per week usually occur when employment gains are less than the workforce growth, resulting in an increasing unemployment rate (background here and here).
The real gauge - the 4 week moving average - was worsened from 339,500 (reported last week) to 347,250. Because of the noise (week-to-week movements from abnormal events AND the backward revisions to previous weeks releases), the 4-week average remains the reliable gauge.
Weekly Initial Unemployment Claims - 4 Week Average - Seasonally Adjusted - 2011 (red line), 2012 (green line), 2013 (blue line)(click to enlarge)
Bankruptcies this Week: Sound Shore Medical Center
Data released this week which contained economically intuitive components (forward looking) were:
All other data released this week either does not have enough historical correlation to the economy to be considered intuitive, or is simply a coincident indicator to the economy.
Weekly Economic Release Scorecard:Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.