The US Industrial economy surged ahead in the latest week (if pipeline scheduling is correct), consumer spending remained strong, and signs abound of a very early Christmas shopping rush.The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) added its 21st advance in 23 weeks, and now stands higher than at any time since October 21st, 2008 (It bottomed May 28th). The index appears to have now began its third-leg up in the recovery at an extremely steep rate, which (if it continues) would suggest the US as a whole emerges entirely from recession within 3 or 4 weeks!
In its dailies (as evidenced by the "Part 7" industrial daily posts on the IV-CWEI site) the week was strong throughout and set a high for 2009 on Wednesday.
On a sector-by-sector basis (as per the "Part 8" posts) the steel delivery natgas scheduling remains very firm (steel has been front-and-center in the recovery) and a good start for the month (vs the previous month) in the paper, chemical, fertilizer, refining, auto, building materials and livestock groups.
The Paperboard-based Consumption Index again softened just a tad in the week, though in its dailies it remained firm and well above the Production Index, supporting the recent momentum of industrial recovery.
The Inventories measure (the cumulative weekly difference between the Production Index and the Consumption Index) continues to drop fast and remains well-below pre-recessionary levels. (So fast it had to be redrawn on the chart above at a 50% lower sensitivity last week). Once inventory-rebuilding kicks in (assuming nothing tries to derail the economy), another meaningful surge in the industrial economy (and natgas demand) is unavoidable.
Lots of signs of an early and vigorous Christmas-shopping rush in the flows (paperboard, paper, refining, etc). With the Inventories measure so week, the retail, distribution and warehousing side may have been caught short on inventory, and consumers figured it out. I would not wait for Thanksgiving to start shopping this year... or you might not be able to find the kids just what they want!
-Robry825
