Monday Morning Economic Assessment

The US Industrial economy (if pipeline scheduling is correct) continued to ease last week, while consumer spending inched modestly higher.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) dropped for its fifth straight week, easing to 116.8 (vs last weeks 117.0), and at its lowest point since November 24th, 2010. In its raw dailies (above), the measure was somewhat flat with just a bit of re-softening late in the week.

The Consumption Index, conversely, again showed a sliver of strength (2nd up-week in a row) by rising to 124.3 (from last weeks revised 123.8). In its raw dailies the measure continued to show the firmness of the prior weeks-end, though the week only was modestly bullish vs seasonals.

The Inventories measure (the cumulative weekly difference between the Production Index and the Consumption Index), long in decline, continues its attempt to flatten out as consumption trends have been falling faster that production.

Overall, gas-flows continue to look like mush, with the economy continuing to recede from its May-31st peak... implying negative GDP growth for the third quarter is likely. Whether the present "micro-recession" extends long enough to become "official" looks to me to continue to be mostly dependent on the US Federal Reserve (who, judging by their actions, must like 9% unemployment)... with government having the ability to only make things worse, not better.

Government ineptitude appeared to hit a new high last week, with the President talking up tax hikes (doubled-down to $3 trillion from $1.5 trillion last week), as key Republicans lobbied the Federal Reserve to end the monetary stimulus of its recent quantitative-easing programs. The Federal Reserve, for its part, entertained itself by doing the "Chubby-Checker-Twist"... sending global stock and commodities markets reeling.

However, the smallest of slivers of hope is appearing, in that consumption is trying to make a turn the last couple of weeks, even while industry retrenches and investment retreats. The consumption index remains meekly above the production index, so we are hanging on just above levels where downward spirals can commence, hence the economy is trying to make a stand.



-Robry825

Monday Morning Economic Assessment

The US Industrial economy (if pipeline scheduling is correct) gave more ground last week, while consumer spending woke from its long nap with a yawn.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) dropped for its fourth week in a row, now down to 117.0 (vs last weeks revised 117.7), and at its lowest point since November 25th, 2010. In its raw dailies (above), the measure was soft vs the prior week, and especially soft against seasonals.

The Consumption Index, however, showed some signs of life, breaking a string of 5 down-weeks in a row by rising to five straight weeks, dipped to 123.8 (from last weeks revised 122.2). In its raw dailies the measure started very soft but quickly firmed against the prior weeks excessively-dismal numbers surrounding the Presidential-Address / Republican-Debate Combo Wednesday & Thursday nights.

The Inventories measure (the cumulative weekly difference between the Production Index and the Consumption Index), long in decline, continues its attempt to flatten out as consumption trends have been falling faster that production.

Overall, gas-flows continue to look mushy, with the economy slowly receding from its May-31st peak... implying negative GDP growth for the third quarter is likely. Whether this present "micro-recession" extends long enough to become "official" looks to me to continue to be mostly dependent on the US Federal Reserve (who, judging by their actions, must like 9% unemployment)... with government having the ability to only make things worse, not better.

Some good news on the political front... President Obama announced a very aggressive plan to combat governmental-deficit spending, by hiking taxes by 1.5 Trillion on investors. Democratic researchers have come into discovery of a tendency by investors to invest more in capital-formation (which generates more hiring) when the government takes a much higher share of their income.

The theory is the more investors are taxed, the more money they have left to hire and boost employment, and that 1.5 Trillion will be sufficient to reach full employment. The economy will be humming in no time!

Republican researchers, on the other hand, are exploring emerging trends that cutting government spending to drain money from consumers hands is likewise stimulative of consumption, and are expected shortly to announce draconian plans for similar cuts to consumers to spur their consumption. This should be a boom to retail sales... further propelling the economy.

(How hard it is to think "outside the box", when your campaign contributions come from "inside the box".)

Not to worry, though... the US dollar is hitting 6 month highs as we speak against the DXY... so that little unemployment check will go a little further at the local (foreign) retail store than it used to.



-Robry825

Monday Morning Economic Assessment

The US Industrial economy (if pipeline scheduling is correct) continued its retreat last week along with consumer spending, while Washington's mid-week "scare-em-up" was a resounding success...sending consumers scurrying for cover.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) dropped for its third week in a row, dipping to 117.7 (vs last weeks revised 119.0), and is now at its lowest point since November 30th, 2010. In its raw dailies (above), the measure was somewhat firm vs the prior week, though the week was very soft once seasonal norms were added in.

The Consumption Index, now down for five straight weeks, dipped to 122.0 (from last weeks revised 125.3). In its raw dailies the measure was very week, and dismally weak Tuesday, Wednesday, and Thursday as consumers looked as if they hunkered-down for the Presidential-Address / Republican-Debate Combo Wednesday & Thursday night, before finally scurrying out of the bomb shelter to buy a few necessities Friday.

The Inventories measure (the cumulative weekly difference between the Production Index and the Consumption Index), long in decline, is trying to flatten out as consumption has been falling faster that production.

Overall, gas-flows continue to look mushy, with the economy slowly receding from its May-31st peak... implying negative GDP growth for the third quarter is likely. Whether this present "micro-recession" extends long enough to become "official" looks to me to continue to be mostly dependent on the US Federal Reserve (who, judging by their actions, must like 9% unemployment)... with government having the ability to only make things worse, not better.



-Robry825

Tuesday Morning Economic Assessment

The US Industrial economy (if pipeline scheduling is correct) continued its retreat last week, consumer spending continued to languish, and signs of the beginnings of the traditional (seasonal) September-ramp-to-Christmas were (so far) meek.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) gave ground for its second week in a row, dropping to 118.9 (vs last weeks revised 120.0). In its raw dailies above, the measure was soft the start of the week then strengthened a bit late on the transition to September and the Labor-Day Holiday. Against seasonals the measure was very soft throughout the week.

The Consumption Index extended its slide for its fourth straight week, dipping to 124.8 (from last weeks 132.1). In its raw dailies the measure was choppy but overall week, and against seasonals especially so.

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

Overall, gas-flows continue to look like mush, with the economy dead-in-the-water. Employment (not business profitability) looks to be taking most of the hit at the moment, though as the consumption index nears the production index, business will have to cut production runs if consumption slides much further if it wants to isolate itself from financial harm.



-Robry825