The US Industrial economy (if pipeline scheduling is correct) lost a little more ground last week, with small losses in both the Production and Consumption indexes.The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) declined for its sixth week in a row, dropping to 120.2 (vs last weeks 120.9). In its dailies, the measure was soft throughout the entire week.
The Consumption Index also declined, dropping to 145.2 (from last weeks 146.0). In its dailies the measure both started and ended flat, with a two-day weak spot in the middle Tuesday and Wednesday.
The Inventories measure (the cumulative weekly difference between the Production Index and the Consumption Index) again continued in its long-term decline.
Overall, US natural gas flows are a tale of two economies, with the "Consumer Economy" (Consumer-spending) holding flat and the "Business Economy" (Industrial & Investment) slowly receding. It is a recipe (if it continues) for both soaring unemployment and soaring corporate profits... and eventually soaring prices and inflation should it continue and become entrenched.
In short, since February, the business & investment side of the US economy took the initiative over the whole of the US economy starting in February, and has begun to lead the economy ever since.
Will it continue and for how long? Is it an aberration? I do not know. But the emerging reality (in the gas-flows) is non-typical and rare historically, and will be interesting to see if it continues.
The bottom of the previous industrial recession (05/29/09) was preceded by a bottom in consumption months earlier (12/28/08), with consumption leading the economy out of recession. The industrial side of the US economy had its run June-2009 through May-2010, well behind the consumer-side, which had its run January-2009 through October-2009.
Prior to that, within the 2008 slide that started the recession, consumption lead the slide (09/08/08 high vs 12/28/08 low) over the business side (09/23/08 high vs 05/29/09 low).
In fact, throughout the life of the gas-flow-economic models (2004-2011) it has been typical for the production model to follow the consumption model, exposing corporate profitability to the whim of the consumer, with corporate profits both soaring and diving in response to changes in consumer-spending.
Has there been a grand change in the scheme of things? Is there some very long-term super-cycle in initiative that is in the process of flipping from the consumer to business? I am taken aback by all this, and it has not (until now) been in the gas-flows, but I have to start thinking of the possibility of it now as it is (at least for now) emerging within the gas flows.
There is probably some political-coloring within all this... There was quite a bump in raw Industrial gas-flow scheduling around the time of last falls November-Elections... presumably in response to the Republican landslide (Republicans being seen as the representative of business and investment).
So has the drop-off on the business end (since Feb-2011) been due to a fall-off of that election-optimism... or has something else changed, with businesses "wising up" to the new (and emerging) political and economic realities (that the consumer may be missing)... to take the initiative within the US economy.
It is one more frightening aspect for US consumers (and the "little-guy"), as we march off toward that potential "Econo-geddon" in a couple more weeks.
-Robry825
***ROBRY-CALC UPDATE: For those using the Robry-Calc Spreadsheet... the software has been revised and I would encourage you to download the latest copy (http://robry825.com/). The update is free to anyone who previously downloaded and I want to encourage its use.
Improvements include speed-optimizations throughout (complex spreadsheets should be significantly faster than the previous Robry-Calc... with my own gas-flow worksheets testing at 200% to 700% faster within the new spreadsheet)
New functionality includes Pivot tables, a PDF-option for saving workbooks, and new sorting/lookup flags within Match/Lookup-type functions. Also, text-sorting functionality has been greatly improved, including a "fast-sort" option for sorted text which may (for very large tables) be hundreds of times faster than previously.
