Monday Morning Economic Assessment

The US Industrial economy gave ground again last week (if pipeline scheduling is correct), as consumption continued its surging ways.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) dropped for its second week in a row, declining to 121.8 (vs last weeks 122.6). In its raw dailies (above) the week was overall flat the first four days of the week then softened sharply Thursday-on.

Conversely, the Consumption Index surged (its third up-week in a row), rising to a record 157.6 (from last weeks 149.2). In its dailies the measure was strong all week.

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

The record-breaking consumptive-surge looks very good in here... with retail sales likely surging... and corporate profits implied at very healthy levels, especially given the caution implied in the production-side of the economy.

The declines in industrial activity (especially given the bullishness in consumption) is disheartening.

I am somewhat doubtful of recent media reports that are giving credit to mild weather for recent economic strength. While a help, this surge in consumption appears much greater than that.

Unfortunately, the easing of the production index takes away from all that... blunting potential retailing employment-gains with industrial-employment stagnation. Probably the real gainer in all this is imports. We will see.

Still, I like the consumption surge, and hope to see some follow through on the industrial end (especially on the transition to the second quarter on April 1st). That is, if that consumption can hold. But we have got to get some follow-through somewhere in the industrial scheduling, where (at first glance) only the Mining / Minerals group is surging in tandem with the consumption (paperboard) indicator.



-Robry825

Monday Morning Economic Assessment

The US Industrial economy turned and retreated last week (if pipeline scheduling is correct), as consumption continued to rally.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) broke its string of three up-weeks, dropping to 122.6 (vs last weeks 123.2). In its raw dailies (above) the week was mildly soft throughout.

The Consumption Index surged (second gain in a row), rising to 149.2 (from last weeks revised 138.1). In its dailies the measure was soft early (over the weekend) then firmed Monday-on.

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

The split between the gaining ways of consumption (breaking above previous short-term highs) vs retreating industrial production reversed the "polarity" of that relationship to negative (consumption trends diverging from industrial production), another worry to add to the bearishness of the internals.

If we could only get the industrial numbers back in line with consumption, we would have something meaningfully bullish for the economy.

Overall, the economy still looks uncertain going forward, with possibilities of either rapid-strengthening or rapid-weakening well-evident in the split between industry and consumers.

Overall... back to a flip of a coin (or flip of a political poll, or flip in current events, or flip in news reporting, etc).



-Robry825

Tuesday Morning Economic Assessment

The US Industrial economy advanced again last week (if pipeline scheduling is correct), as consumption turned up after its previous pause.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) advanced for its third consecutive week, advancing to 123.2 (vs last weeks 122.7). In its raw dailies (above) the week was mildly soft.

The Consumption Index also gained (breaking its string of 3 down-weeks in a row), gaining to 138.1 (from last weeks revised 134.1). In its dailies the measure softened sharply mid-week.

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

While it was good to (finally) see the two lead indexes (Production and Consumption) sync in the recent industrial advance, the advance still retains its weak look... with food-group scheduling hovering at highly-bearish levels, and steel-group scheduling (indicative of durable-goods) softening in the latest week.

Overall, the 2011-4th qtr strength is now long-gone... and the economy still looks adrift... awaiting cues as to which direction to turn.



-Robry825

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