Monday Morning Economic Assessment

The US Industrial economy gained ground again last week (if pipeline scheduling is correct), while consumption continued its slow retreat.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) gained for its second consecutive week, advancing to 122.7 (vs last weeks 121.9). In its raw dailies (above) the week began modestly firm then softened late.

The Consumption Index, conversely, declined for its third week in a row, falling to 137.6 (from last weeks revised 140.0). In its dailies the measure was firm throughout the week, although the overall index declined as an even stronger week fell off the back end of its 4-week moving average.

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

Internally, economic tension remains well-evidenced within the gas-flows (in stark contrast to the Fourth-Qtr-2011 flows which were clearly bullish almost to quarters end). The sea-saw nature of the Production & Consumption indexes (one climbs while the other falls, then vice-versa) is evidence that the "fulcrum" of the economy is unmovingly anchored in the mud.

The strength in the food-group last week was again worrisome. Food-group scheduling (now at strongly-bearish levels) has been contra-indicative to economic trends in the past, and its strengthening in here to such extremes is consistent with risk to the consumptive-end of the US economy.

Overall, the economy retains its adrift-look and continues to await cues as to which direction to turn.



-Robry825

Tuesday Morning Economic Assessment

The US Industrial turned and advanced (if pipeline scheduling is correct), recently-strong consumption continued to backtrack, and congress finally figured out how to "band-aid-up" the economy without killing it in the process.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) broke its string of five down-weeks in a row and climbed to 121.9 (vs last weeks 121.3). In its raw dailies (above) the week saw the measure mostly throughout the week to its close.

The Consumption Index, conversely, put in its second down-week in a row... falling to 137.6 (from last weeks revised 140.0). In its dailies the measure started the week strong and maintained a firm look throughout the week.

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

Internally, economic tension remains well-evidenced within the gas-flows (in stark contrast to the Fourth-Qtr-2011 flows which were clearly bullish almost to quarters end). The sea-saw nature of the Production & Consumption indexes (one climbs while the other falls, then vice-versa) is evidence that the "fulcrum" of the economy is unmovingly anchored in the mud. The strength in the food-group indicative of doubt in the consumption that drives the economy.

I was glad to see congress finally able to come to grips with the payroll-tax-et-all issues without the traditional public airing-of-the-dirty-laundry. That is not to say that there is no dirty laundry... but that they were actually able to get something done without resorting to flinging the stuff down the Capitol-Hill steps!

Overall, the economy appears adrift and continues to await cues as to which direction to turn.



-Robry825

Monday Morning Economic Assessment

The US Industrial economy (if pipeline scheduling is correct) backed off one more notch, as recently-strong consumption eased.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) declined for its fifth week in a row, slipping to 121.3 (vs last weeks 121.4). In its raw dailies (above) the week started soft but restrengthened sharply late in the week.

The Consumption Index broke it's string of three up-weeks in a row, slipping down to 140.0 (from last weeks revised 143.0). In its dailies the measure mildly followed the pattern of the production index (soft early then strengthening late).

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

Internally, tension appears to remain within the economy between uncertain consumption and retreating industrial production, with steel-plant inputs (indicative of durable-goods) soft, and food-group scheduling bearishly strong. There is a glimmer of hope, however, in the late-week strengthening... if it can hold.

Overall, the economy appears adrift (following late Decembers "$40-a-week-payroll-tax-in-two-months" congressional signal). On the horizon that payroll tax increase (due the end of the month) is probably about to come back into focus, and how that gets dealt with probably shapes 2012 going forward.

Still waiting for Congress (and the Federal Reserve) to get their acts together.



-Robry825

Tuesday Morning Economic Assessment

The US Industrial economy (if pipeline scheduling is correct) continues to retreat, as strong consumption questions itself.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) declined for its fourth week in a row, slipping to 121.4 (vs last weeks 123.0). In its raw dailies (above) the week started slightly firm but resoftened late and into the weekend.

The Consumption Index worked higher for it's third week in a row, edging up to 142.0 (from last weeks 142.7), setting another high for the fall recovery. In its dailies, however, the measure contradicted itself internally... with sharply-weakening data points (throughout the week) more than balanced out by even weaker data that fell off the end of the overall index's 4-week moving average.

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

Internally, there appears great tension within the economy between uncertain consumption and retreating industrial production, with steel-plant inputs (indicative of durable-goods) soft, and food-group scheduling bearishly strong. Worse, the peak in the consumption index is following the peak in the production index, and (unless consumption can turn the production index and not vice-versa) puts the momentum back into the hands of a bearish production index (this will have to be watched... if it does pan out it is both rare, and frightening).

Overall, the economy at best appears adrift following late Decembers "$40-a-week-payroll-tax-in-two-months" congressional signal, and at worst may have peaked and started a contraction, as consumers appear skittish and industrial production is in full retreat.

On the horizon that payroll tax increase (due the end of the month) is probably about to come back into focus, and how that gets dealt with probably shapes 2012 going forward.

Congress (and the Federal Reserve) remain to get their acts together.



-Robry825