Sunday Night Economic Assessment

The US Industrial economy held steady last week (if pipeline scheduling is correct), while consumer spending.continued to grow. In the dailies (which I am including for this weeks post) there seemed to be a good, positive reaction in both consumption and production midweek following the Presidents State-Of-The-Union address.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) following three weekly advances in a row was unchanged last week (121.4 vs last weeks record 121.4). In its dailies (See the "Part 7" posts on the Investor Village site) the index started the week soft but firmed extremely sharply with the Wednesday/Thursday scheduling. Fridays raw gas-flow tracking (see below) picked up 2.07 Billion Cubic Feet scheduled for delivery to US factories, a record for the tracking model.

The Consumption Index also rose (for its second week in a row) to 144.2 (from last weeks 142.9, and just shy of its record 146.5 high). In its dailies the measure (echoing the Production Index) also reached record levels on Thursday and again on Friday.

The Inventories measure (the cumulative weekly difference between the Production Index and the Consumption Index) continued in its long-term decline.

Overall, the recovery appears strongly supported by last weeks post State-Of-The-Union surge, buoyant consumer-spending, an uncharacteristically-large lead in the Consumption Index over the Production Index, and continuing declines in the Inventories measure.


-Robry825



Daily Tracking (Natural Gas Scheduled Deliveries)
=====================================

..............................Industrial..................Paperboard
Gas Day..............(Production)..............(Consumption)
-------------..............-------------------............----------------------
01/21/11...............1.915..(BCF)............31.94..(MMCF)

01/22/11...............1.951.......................33.90
01/23/11...............1.958.......................33.80
01/24/11...............1.950.......................33.80
01/25/11...............1.983.......................32.42
01/26/11...............2.000.......................37.10
01/27/11...............2.051.......................41.38
01/28/11...............2.073.......................42.63

01/29/11...............2.064i......................39.36i

Sunday Night Economic Assessment

The US Industrial economy continued to slowly push ahead last week (if pipeline scheduling is correct), amidst continuing robust consumer spending.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) advanced for the third week in a row to a record 121.4 (from last weeks 121.2). In its dailies (See the "Part 7" posts on the Investor Village site) the index was again volatile throughout the week but softened late.

The Consumption Index also rose (for its second week in a row) to 144.2 (from last weeks 142.9, and just shy of its record 146.5 high). In its dailies the measure (contrary to the Production Index) softened early and firmed late-week.

The Inventories measure (the cumulative weekly difference between the Production Index and the Consumption Index) continued in its long-term decline.

Overall, the recovery appears strongly supported for the time being by buoyant consumer-spending, an uncharacteristically-large lead in the Consumption Index over the Production Index, and continuing declines in the Inventories measure.

Concerns still center mostly on the strength of the food group (a contra-indicator to consumption), suggesting a shallowness to the recovery in spite of its apparent breadth (suggested in the gas flows).

Another concern is the continual foot-dragging (in the business end of society) implied by the slowness in response of the Production Index, which I think (in spite of Novembers elections) belies continuing nervousness in the productive end of society (not good when you want businesses to hire to bring that 9%-ish unemployment rate down).

On the table (for that productive end of society) the past couple of weeks is the Republicans attempt for a repeal vote on the recent health care reform bill in the Senate (The US house, now dominated by newly-elected Republicans, already voted to repeal).

The whole process is fraught with risk at both ends. If the repeal-vote fails, it's another blow to business confidence. If they actually repeal, it's a potential larger blow to consumer-confidence. And if consumers get a whiff of higher medical expenses anywhere throughout the process and start to cut back other spending to accommodate it, 12% unemployment here we come.

It's an issue that I wish would go away for a while. Or perhaps even better... be shelved for a couple months so that cooler political heads could sort through the whole mess. President Obama and Republicans were able to put together a last minute compromise on taxes & unemployment late last year that (by the look of the gas-flows) kept Novembers "Micro-recession" from becoming real.

And with that frighteningly-strong food group (as mentioned above), small things (like brief market pull-backs) could potentially ignite consumer-fear quickly.

For the moment (all things considered) the economy remains (for the moment) underpinned by gas-flow-suggested fundamentals, and should (assuming none of these worries pop up) continue to slowly advance.



-Robry825

Sunday Night Economic Assessment

The US Industrial economy advanced again last week (if pipeline scheduling is correct), as robust consumer spending strengthened into January.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) rose for its second week in a row (and again set a new high), rising to 121.2 (from last weeks 120.5). In its dailies (See the "Part 7" posts on the Investor Village site) the index was volatile though firm throughout the week (especially against seasonals).

The Consumption Index also rose smartly to 142.9 (from last weeks 139.0). In its dailies the measure was impressively strong throughout the week.

The Inventories measure (the cumulative weekly difference between the Production Index and the Consumption Index) continued in its long-term decline.

The Food Group (see "Part 8" posts on the Investor Village site) continues as a concern, hovering near recession-highs. The Food group has a contra-relationship with consumption, and gains to the measure generally coincide with weakness in consumer spending.

Overall, the economy looks to be well supported by the resurgence of strong consumer spending, renewed and continuing strength in industrial production (and presumably hiring), declining inventories, and probably (on the investor / business end of society) higher confidence from political changes since November.

ROBRY DATA MOVES TO ENERCAST (http://www.firstenercastfinancial.com/energy/)

For those following the natural gas markets, First Enercast Financial has picked up the data I share on their web site, and (in a collaborative effort) offers Robry825 modeled data both in text and in downloadable ".ods" (Open Document Spreadsheet) data formats. The new Enercast site is now the primary, most comprehensive site for obtaining Robry825 gas-flow data... including years of historical back-data from my modeling that you can now download and access for spreadsheet modeling, charting, etc.

(First Enercast also shares my appreciation for the public domain, so the Robry825 data downloads will continue to be free of cost and free of restrictions... and can be shared with friends, reposted, published (etc) at your discretion... for the better of all).

Also linked through the site is a computer spreadsheet application ("Robry-Calc")... an offering of the software that I personally use to produce the data that I share, which was progressively developed by Citadel5 Software Development Services (a European firm that I consider the worlds foremost in spreadsheet design).

I am very excited for the chance to offer this spreadsheeting software, and I believe it to be in many ways revolutionary (a photo of one of my worksheets can be found below, which when clicked upon will enlarge to an example from a dual-monitor configuration). The spreadsheet is simple to use on its surface (for a novice), but is packed with advanced features buried within to allow it to unfold into very large, complex, powerful configurations.

Moreover, having a spreadsheet to offer gives me a path to explore in the future... towards perhaps publicly sharing the models themselves in the future (even the possibility of going open source), in the hopes that others might be able to build upon and improve upon what I offer.

Also, should the software really take off, its revenues could help not only to fund and expand the new Enercast collaborative site, but potentially to purchase whole data sets and analysis for conversion to public domain (at least one can dream).



-Robry825

Sunday Night Economic Assessment

The US Industrial economy turned higher last week (if pipeline scheduling is correct), while consumer spending remained at very strong levels.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) broke its string of two down-weeks in a row (and took out its December-2010 high in the process), rising to 120.5 (from last weeks 120.1). In its dailies (See the "Part 7" posts on the Investor Village site) the index was on the soft side on seasonals (down about 1% from the prior week) though still very respectable given the passing of the Christmas holidays.

The Consumption Index broke its string of four consecutive weekly gains, slipping to 139.0 (from last weeks 141.8). In its dailies the measure was soft early (mostly on seasonals) then firmed late-week.

The Inventories measure (the cumulative weekly difference between the Production Index and the Consumption Index) continued to accelerate in is resumption of its long-term decline.

The Food Group (see "Part 8" posts on the Investor Village site) remains a concern, hovering near recession-highs. The Food group has a contra-relationship with consumption, and gains to the measure generally coincide with weakness in consumer spending.

Overall, the economy looks to be strongly underpinned by the resurgence of strong consumer spending, renewed and continuing strength in industrial production (and presumably hiring), declining inventories, and probably (on the investor / executive end of society) higher confidence born of the political-landscape changes of November.

Of course, the flip-side of that "political-landscape change" may be increased consumer-nervousness (hinted at by the food-group numbers). That "Consumer-nervousness" card is a trump card. If played into consumer-spending, it beats all else.



-Robry825

Sunday Night Economic Assessment

The US Industrial economy eased off another notch again last week (if pipeline scheduling is correct), amidst continuing strong consumer spending.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) edged lower for its second strait week, dipping to 120.1 (from last weeks 120.2). In its dailies (See the "Part 7" posts on the Investor Village site) the index started off flat on Christmas eve seasonals then firmed sharply as the week progressed.

The Consumption Index put in its fourth weekly gain in a row, climbing to 141.8 (from last weeks 137.8). In its dailies the measure (as last week) was seasonally-soft though still strong relative to prior weeks.

The Inventories measure (the cumulative weekly difference between the Production Index and the Consumption Index) continued to accelerate in is resumption of its long-term decline.

Overall, the economy looks to be continuing its recovery from its November "micro-recession", as gas-flow-estimated consumption has regained its composure. Within the individual sectors tracked (see "Part 8" posts on the Investor Village site) the metals group (and in articular the steel group) continue to show good progress in recovering from their November-lows.

The steel group sampling (now up to 174 mmcf/day in December vs its 147 mmcf/day 16-month low in November) is especially reassuring as it has been a bellwether of the recession over the past couple of years (as it should... given the prominent usage of metals used within industrial production, especially in durable goods).

One warning sign that remains, however, is the Food group, which leapt in November to surplus and is now approaching 2008-recession highs. The Food group has a contra-relationship with consumption, and gains to the measure generally coincide with weakness in consumer spending. I take it as a sign of deep nervousness within consumers, who (given the strength in the consumption index) are presumably continuing to spend even while nervous... hopefully reflecting unfounded nervousness in the future of others, rather than themselves.

Overall, the US industrial economy looks (as last week) to be firmly underpinned by an excess of consumption over production, the recent surge in consumption, and the resumption of declining Inventories measure.



-Robry825