Free Markets, Free People

Economy

Economic Statistics for 14 & 17 Aug 15

A hectic schedule prevented me from posting Friday’s economic data, so here it is, along with the releases from today.

14 Aug 15

Producer Prices for Final Demand rose 0.2% in July, with PPI-FD less food and energy rising 0.3%. On a year-over-year basis, PPI-FD is down -0.8 at the headline level, but up 0.6% at the core. The remaining set of data for PPI-FD are below:

PPI-FD less food, energy & trade services – M/M change: 0.2%
PPI-FD less food, energy & trade services – Y/Y change: 0.9%
PPI-FD Goods – M/M change: -0.1%
PPI-FD Goods – Y/Y change: -3.7%
PPI-FD Services – M/M change: 0.4%
PPI-FD Services – Y/Y change: 0.6%

The Fed reports that industrial production rose by 0.6% in July, while capacity utilization in the nation’s factories rose 0.3% to 78.0%. The prime factor in the month’s jump was a 10.6% surge in motor vehicle production.

The University of Michigan’s Consumer Sentiment Index index fell -0.2 points to 92.9 in August.

17 Aug 15

The Empire State Manufacturing Survey plunged deeply into negative territory for August, falling from 3.86 to -14.92. This is the weakest reding for this indicator since 2009.

The NAHB’s Housing Market Index rose 1 point to 61 in August, as new homes are becoming a source of strength for the economy.

E-Commerce retail sales in the 2nd Quarter of 2015 rose a strong 4.2%, with a year-on-year gain of 14.1%.

A strong dollar was a plus for foreign investment in Jun, as net foreign demand for US securities rose $10.1 billion to $103.1 billion.


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Economic Statistics for 13 Aug 15

Retail sales rose 0.6% in July, with sales less autos and sales less autos and gas both up 0.4%. May and June sales were revised upwards as well.

July export prices fell -0.2%, while import prices fell -0.9%. Year over year, export prices are down -6.1% and import prices are down -10.4%.

Business inventories rose 0.8% in June, well ahead of a 0.2% rise in sales. The mismatch lifts the inventory-to-sales ratio to 1.37 from 1.36.

Initial weekly jobless claims rose 4,000 to 274,000. The 4-week average fell 1,750 to 266,250. Continuing claims rose 15,000 to 2.273 million.

The Bloomberg Consumer Comfort Index rose 0.4 points to 40.7 in the latest week.

The Fed’s balance sheet rose $2.9 billion last week, with total assets of $4.489 trillion. Reserve bank credit rose $2.5 billion.

The Fed reports that M2 money supply rose by $1.8 billion in the latest week.


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Economic Statistics for 12 Aug 15

The MBA reports that mortgage applications rose 0.1% last week, with purchases down -4.0% and refis up 3.0%.

The Atlanta Fed Business Inflation Expectations Index fell -0.2%, with businesses now expecting annual inflation of 1.8%.

The Labor Department’s JOLTS report shows that job openings fell to 5.249 million in June from 5.357 million in May. 

The Treasury reports that July’s budget deficit totaled $149.2 billion. The Fiscal Year to date deficit stands at $428.0 billion vs $460.5 billion a year ago.


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Economic Statistics for 11 Aug 15

The Labor Market Conditions Index for July came in slightly below expectations at 1.1 vs a revised 1.4 in June. 

The NFIB Small Business Optimism Index for July rose 1.3 points to a better-than-expected 95.4.

Productivity rose 1.3% in the 2nd Quarter, while growth in Unit Labor Costs was held down to 0.5%.

Redbook reports that last week’s retail sales growth rose to a still-soft 1.9% on a year-ago basis, from the previous week’s 1.7%.

Wholesale inventories rose a surprising 0.9% in June, while a weak 0.1% rise in sales left the stock-to-sales ratio at a hefty 1.30.


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Economic Statistics for 7 Aug 15

The Labor Department reports that a mediocre 215,000 net new jobs were created in June, with the unemployment rate unchanged at 5.3%. Also unchanged was the labor force participation rate, at 62.6%. Average hourly earnings rose 0.2%, while the average workweek increased by one tick to 34.6 hours.

Consumer credit rose a strong $20.7 billion in June, including a strong gain of $5.5 billion for revolving credit.


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Economic Statistics for 6 Aug 15

Chain stores reporting sales today say that July was a weak month, with lower rates of year-on-year sales growth compared to June.

A major Army troop cut made for an outsized 105,696 layoff count in July, according to Challenger.

Gallup’s US Payroll to Population Employment Rate was unchanged at 45.5% in July.

Initial weekly jobless claims rose 3,000 to 270,00. The 4-week average fell 6,50 to 268,250. Continuing claims fell 14,000 to 2.255 million.

The Bloomberg Consumer Comfort Index fell -0.2 points to 40.3 in the latest week.

The Fed’s balance sheet rose $0.9 billion last week, with total assets of $4.486 trillion. Reserve bank credit fell $-9.0 billion.

The Fed reports that M2 money supply grew by $12.1 billion in the latest week.


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Economic Statistics for 5 Aug 15

The MBA reports that mortgage applications rose 4.7% last week, with purchases up 3.0% and refis up 6.0%.

ADP estimates that only 185,000 net new private sector jobs were created in July.

Rising imports in June led the US trade deficit to rise to a higher-than-expected $-43.8 billion for the month.

Gallup’s US Job Creation Index remained unchanged at 32 in July.

The ISM Non-Manufacturing Index surged 4.3 points to a surprising 60.3 in July.

The PMI Services Index rose 0.9 points in July to 55.7.


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So, how IS the economy doing?

Dale keeps you abreast of the daily numbers and if you even glance at them semi-regularly, you know they’re not particularly good.

So how have we been doing lately economically?  Well, a little historical context might help:

In the 138 years from 1870 to 2008, the US economy expanded by about an average of 3% a year. After the revisions to GDP data from 2012-2014, we see that the U.S. economy since the financial crisis has been growing an average of 2.0% a year versus the earlier 2.3%. The difference between 3% and 2% may not sound like much, but think of it this way:

At a 3% growth rate the economy doubles in about 24 years.
At a 2% growth rate the economy doubles in about 36 years – 50% MORE time!

And don’t forget, while the government tries to sell you on 2% being the new norm (and you should like it), much of the recent GDP results have involved huge government spending.  So it is actually worse than the 2%.

Here’s a fairly interesting bottom line:

Today there are 136 people receiving some sort of government benefit for every 100 people employed in the private sector.

That can’t go on indefinitely.  Greece and Puerto Rico have already demonstrated that.  And, although it isn’t the only factor leading to this economic demise, it certainly is one of them.

You see, math and reality don’t bow to ideology and fantasy.

~McQ