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
