Steven Hansen's  Instablog

What a nasty week. I think the economic releases this past week were flawed to the dark side, and one reader accused me of being bullish. I had to stand in front of the mirror to see if something had changed.

Six months ago I was generally accused of being too pessimistic.

The Econintersect economic forecast was released this week for June 2012 continues to show moderate growth - although marginally weaker. There was degradation both in our government pulse point,and in some of our transport related pulse points. There are no recession flags showing in any of the indicators Econintersect follows.

ECRI has called a recession. Their data looks ahead at least 6 months and the bottom line for them is that a recession is a certainty. The size and depth is unknown but the recession start has been revised to hit around mid-year 2012.

This week ECRI's WLI index value has been jumping around due to backward revision. The index is hovering around zero which means the economy six month from today will be as bad as it is today.

Initial unemployment claims increased from 370,000 (reported last week) to 383,000 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 - rose from 370,000 (reported last week) to 374,500. 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.

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Data released this week which contained economically intuitive components (forward looking) was only rail movements which is still indicating a moderate expansion if one ignores coal. Econintersect does not see any other data release this week as particularly intuitive in understanding future economic conditions.

April 2012 Construction Spending Continues to Show Sector Expansion
BLS Jobs Growth of 69,000 Is Better than Headlines in May 2012
April 2012 Personal Consumption Shows Expanding Consumer Sector
May 2012 ISM Manufacturing Declines, Important Component Strengthens
My 30-Year College Graduation Reunion
Social Media Stocks: Reversal of Fortunes
Second Estimate 1Q2012 GDP Is Revised Down to 1.9%
ADP Jobs Growth 133,000 in May 2012 Matches Economic Potential
How I Was Dis-invited to Testify Before Congress about Derivatives
Summary of Week Ending May 28, 2012
April 2012 Pending Home Index Continues To Show Improving Home Sales
Politicians' Nonsense: Higher Taxes and Lower Spending
More Downside Ahead
Gold and Silver Pulling Back: Does It Show Fear of Deflation?
May 2012 Conference Board Consumer Confidence Declines for Third Month
March 2012 Case-Shiller Home Price Decline Continues to Moderate
Facebook: Top Valuation Should be $7.50
Embedded Examiners: Married to the Bosses
Economic Forecast Is for Little Change in June 2012
The Great Debate©: Is the Three-Year Bull Market Over?
The Week Ahead: More Economic Evidence
Capitalism Lost: What America has Forgotten
There is Boundless Hope for Resolving the Crisis
Analysis of Political Bias in Wikipedia
Facebook Moves toward Analyst Average, But Is That the Right Price?
Trefis Week in Review: 25 May 2012
Final May 2012 Michigan Consumer Sentiment at Post Recession High

Bankruptcies this Week: Filene's Basement, Dewey & LeBoeuf (fka Dewey Ballantine), B+H Ocean Carriers, WP Steel Venture

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.