Sunday Night Economic Assessment

The US Industrial economy backtracked a little bit more last week (if pipeline scheduling is correct), while consumer spending turned modestly higher.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) eased for the third straight week, settling at 114.1 (from the prior weeks 114.5). In its dailies the week started soft, firmed midweek, and ended the week strong.

The paperboard-based Consumption Index reversed itself again (it has been waffling back-and-forth lately), gaining to 125.6 (from the previous weeks 125.0), In its dailies the week was soft early, firmed briefly mid-to-late-week, then softened again late into the weekend.

The Inventories measure (the cumulative weekly difference between the Production Index and the Consumption Index) continued its continual descent.

In spite of the softness of the past three weeks, the economy (at least for now) appears firmly underpinned by consumer spending, with the deficit of the Production Index to the Consumption Index, and the deep and continuing decline of the Inventories Measure continuing to lend credence to the economic recovery.

Remaining a concern is the continuing lag in the Production vs Consumption Index, which continues to imply a shallowness in the productive end of the US economy... which is a continuing drag on employment and job-creation.


-Robry825

Sunday Night Economic Assessment

The US Industrial economy gave something back last week (if pipeline scheduling is correct), as did consumer spending.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) slipped for the second straight week, dipping to 114.5 (from the prior weeks 115.0), In its dailies the week defied seasonal patterns and appeared steady & little changed from the prior holiday week.

The paperboard-based Consumption Index reversed its gains from the prior week and edged back to 125.0 (from the previous weeks 127.1), In its dailies the week was soft early, firmed briefly mid-to-late-week, then softened again Friday into the weekend.

The Inventories measure (the cumulative weekly difference between the Production Index and the Consumption Index) for the gazillianth week-in-a-row continued its descent.

Overall, gas-flows suggest the recovery remains intact for the moment, though signs of stain are increasing... leading one to wonder if the recovery could loose its initiative.

One area of increasing concern are imputs to food processing facilities (See the "Food" group on the IV-CWEI "Part-8 Sector Demand" posts). Scheduled gas flows into food plants have been steadily increasing as of late, but this is not a healthy sign for the economy as food tends to be a contra-indicator (probably because as America becomes more nervous, it heads to the fridge).

(Now in the sarcastic corner of my mind, I have been weighing a consumer confidence index derived from Food-Plant imputs... which are predominantly comfort food (junk food produced from dozens of facilities) such as snack-cakes, cookies, chips, pop bottling plants, cattle-feeders, fried chicken plants, etc... I could call it the "Refrigerator index"... Then you all would know that I had lost my mind!)

Overall, the deficit of the Production Index to the Consumption Index, and the deep and continuing decline of the Inventories Measure continue to underpin the economic recovery. Remaining a concern is the continuing lag in the Production vs Consumption Index, which continues to imply a shallowness in the productive end of the US economy... which is a continuing drag on employment and job-creation.




-Robry825

Sunday Night Economic Assessment

The US Industrial economy took a break last week (if pipeline scheduling is correct) while consumer spending turned up.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) eased for the first time in eight weeks, slipping slightly to 115.0 (from the prior weeks 115.1), In its dailies the week appeared close to seasonal trends of the Easter/Spring Break holiday.

The paperboard-based Consumption Index conversely turned up (for the first time in five weeks), rising to 127.1 (from the previous weeks 125.7), In its dailies the week was soft early, firmed briefly midweek, then softened late.

The Inventories measure (the cumulative weekly difference between the Production Index and the Consumption Index) continued its seemingly never-ending descent.

Overall, the deficit of the Production Index to the Consumption Index, and the deep and continuing decline of the Inventories Measure continue to underpin the economic recovery. Remaining a concern is the continuing lag in the Production vs Consumption Index, which continues to imply a shallowness in the productive end of the US economy... which is a continuing drag on employment and job-creation.




-Robry825

Sunday Night Economic Assessment

The US Industrial economy again pushed ahead last week (if pipeline scheduling is correct) while consumer spending eased slightly.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) scored its seventh rise in as many weeks, gaining to 115.1 (from the prior weeks 114.4), and achieved its fourth record high in a row. In its dailies the week followed seasonal trends showing firmness early before settling down into the start of the easter holiday.

For the fourth week in a row the paperboard-based Consumption Index again bucked the trend and dropped to 125.7 (from the previous weeks 126.2), In its dailies the week was soft and choppy.

The Inventories measure (the cumulative weekly difference between the Production Index and the Consumption Index) continued to slow its decline.

Overall, the deficit of the Production Index to the Consumption Index, and the deep and continuing decline of the Inventories Measure continue to underpin the economic recovery. The ongoing drop-off in the consumption index remains the largest concern, and could stunt the forward-momentum of the recovery should it not soon reverse (Though the consumption index is a very volatile index... mirroring the emotional volatility of the consumer).

Also remaining a concern is the continuing lag in the Production vs Consumption Index, which continues to imply a shallowness in the productive end of the US economy... which is a continuing drag on employment and job-creation.




-Robry825

Sunday Night Economic Assessment

The US Industrial economy continued to forge ahead last week (if pipeline scheduling is correct) while consumer spending eased slightly in the wake of last Sundays landmark health-care congressional agreement.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) extended its recent push for the sixth week in a row, rising to 114.4 (from the prior weeks 113.7), and achieved its third record high in as many weeks. In its dailies (as per the "Part 7" industrial daily posts on the IV-CWEI site) the week started firm over the weekend, softened ever so slightly on the congressional deal for a couple days, then restrengthened dramatically late-week (in line with pre-Easter seasonals).

For the fourth week in a row the paperboard-based Consumption Index again bucked the trend and dropped to 126.2 (from the previous weeks 128.4), In its dailies the seek started soft over the weekend, firmed modestly for a couple days on the congressional deal, then softened at the close of the week.

The Inventories measure (the cumulative weekly difference between the Production Index and the Consumption Index) continued to fall, although at a slower pace than in recent weeks.

It seemed there was very little impact within the gas-flows to last Sundays announced health-care deal, with the overriding multi-week trends of rising production continuing to close the gap to slowly declining consumption. Perhaps Sundays announcement was expected. Perhaps it was not believed. Or perhaps it was ignored.

My own long-term view of the health-care bill is that it will (if it survives procedural and legal challenges) eventually prove to be a cash-flow transfer away from the consumer (health-insurance payer) to the investor/producer (doctors, lawyers, drug companies, etc) that will have to be accommodated somehow by either the Federal Reserve or further government stimulus... to prevent consumer-dollars from being diverted into health care (to cover 31+- million new US citizens) from elsewhere in the economy.

Chief of concerns continues to be the ongoing slow drop-off in the consumption index dailies, should it not reverse soon (Though the consumption index is a very volatile index... mirroring the emotional volatility of the consumer). Also of concern is the continuing lag in the Production vs Consumption Index (which continues to imply a shallowness in the productive end of the US economy... which is a continuing drag on employment and job-creation).



-Robry825

Sunday Night Economic Assessment

The US Industrial economy advanced again last week (if pipeline scheduling is correct) and consumer spending eased ahead of congressional passage Sunday of a landmark (and highly controversial) Democratic health-care bill.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) forged ahead for the fifth week in a row, rising to 113.7 from the prior weeks 113.0, and scored its second record high in as many weeks. In its dailies (as per the "Part 7" industrial daily posts on the IV-CWEI site) the week was stronger throughout vs the prior week.

For the third week in a row, the paperboard-based Consumption Index went the other way and dropped to 128.4 from the previous weeks 134.8. In its dailies the week was extremely soft, continuing to 24 days the pronounced midweek easing of four weeks ago.

The Inventories measure (the cumulative weekly difference between the Production Index and the Consumption Index) continued to fall for the gazillianth week in a row.

Interesting enough, the dailies of the Consumption Index approached the dailies of the Production Index last week, suggesting at a neutralized economy that (at least for the time being) is at risk of stalling. The recent drop-off in the consumption index dailies is a big concern, should it not reverse soon (Though the consumption index is a very volatile index... mirroring the emotional volatility of the consumer). Also of concern is the continuing lag in the Production vs Consumption Index, which continues to imply a shallowness in the productive end of the US economy... which is a continuing drag on employment and job-creation.

As of tonight, we appear to have a health-care bill that will be making the news and echoing back and forth in the minds of both consumers and producers Monday. That bill is portrayed as pro-consumer by Democrats and anti-consumer by Republicans.

My own long-term view of the health-care bill is that it will (if it survives procedural challenges in congress and legal challenges in the courts) eventually prove to be a cash-flow transfer away from the consumer (health-insurance payer) to the investor/producer (doctors, lawyers, drug companies, etc) that will have to be accommodated somehow by either the Federal Reserve or further government stimulus... to prevent consumer-dollars from being diverted into health care (to cover 31+- million new US citizens) from elsewhere in the economy.

In the short-term however, the emotional-aspects of the health-care bill should outweigh its practical aspects (given this emotion-driven economy and emotional-driven markets). If consumers see it the Democrats way (pro-consumer) it might just give a quick boost to consumer confidence (and consumer spending). Of course if consumers see it the Republican way than the economy will be at risk, given the very recent softening implied by the gas-flows in consumer spending.

It will be real interesting to watch the gas-flows this week to see which way it actually goes.



-Robry825

Sunday Night Economic Assessment

The US Industrial economy again gained ground last week (if pipeline scheduling is correct), while already-robust consumer spending continued to slowly ease.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) pushed ahead for the fourth week in a row, rising to 113.0 (from the prior weeks 112.4), taking out its Feb-1st high (112.5). In its dailies (as per the "Part 7" industrial daily posts on the IV-CWEI site) the week was softer throughout from the prior week.

The paperboard-based Consumption Index went the other way, dropping to 134.8 from the previous weeks 137.9 (second down-week in a row). In its dailies the week was very soft, continuing to 17 days the pronounced midweek easing of three weeks ago.

The Inventories measure (the cumulative weekly difference between the Production Index and the Consumption Index) again continued its never-ending chant of down-down-down.

Overall, the deficit of the Production Index to the Consumption Index, and the deep and continuing decline of the Inventories Measure continue to underpin the economy. The sudden drop-off in the consumption index dailies is a big concern, should it not reverse soon (Though the consumption index is a very volatile index... mirroring the emotional volatility of the consumer). Also of concern is the continuing lag in the Production vs Consumption Index, which continues to imply a shallowness in the productive end of the US economy... which is a continuing drag on employment and job-creation.



-Robry825