The US Industrial economy advanced again last week (if pipeline scheduling is correct), as consumption somewhat backed away from its recent strength.The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) climbed for the sixth time in the last seven weeks, rising to 121.0 (vs last weeks 120.1), its highest reading since June 29th. In its raw dailies (above), the measure was very strong early through Wednesday before trailing off for the Thanksgiving holiday weekend.
The Consumption Index backed off from its highs of the prior week, dipping to 137 (from last weeks revised 140.1). In its dailies the measure started the week soft but firmed over the Thanksgiving holiday period.
"Black Friday" sales, though talked up in the press (vs year ago numbers) appeared lackluster in the gas-flows... beating last-years "micro-recession" numbers only barely but failing to beat 2-week-ago numbers. (Note the year-ago downward-plunge above in that green consumption line... last years "Black Friday" sales were horrid.)
The Inventories measure (the cumulative weekly difference between the Production Index and the Consumption Index) continued its long-term decline.
For the time being, the economy continues to appear supported by firmness in industrial (factory) natgas-scheduling, and the recently-widened gap between the production and consumption indexes.
Of concern is last weeks softness in the consumption index, and a somewhat bearish restrengthening of food-group scheduling (indicative of declining consumer confidence). Federal Reserve policy still appears hawkish (allowing liquidity to drain from the US), theoretically capping economic expansion and questioning the sustainability of the recent economic advance.
Corporate profitability continues to look to be solid (so far) for the 4th quarter, and given the caution in the business sector, should surprise on the upside for many quarters to come... as long as business-caution persists.
-Robry825
