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
