Chain stores today are reporting moderate increases in rates of year-on-year sales growth in September.
A drop in wholesale sales of -0.7% swelled inventories by 0.7%, leading to a hefty stock-to-sales ratio of 1.19.
Initial weekly jobless claims fell 1,000 to 287,000. The 4-week average fell 7,000 to 287,750. Continuing claims fell 21,000 to 2.381 million.
The Bloomberg Consumer Comfort Index rose 2 points to 36.8 in the latest week.
The Fed’s balance sheet rose $5.1 billion last week, with total assets of $4.455 trillion. Reserve bank credit rose $3.9 billion.
The Fed reports that M2 money supply fell by $-7.3 billion in the latest week.
The Obama economy is a mess, with median incomes retreating, fudged employment numbers and generally the usual mess you can expect from a over-regulated and highly manipulated “market”. In other words, it stinks because of government as much as anything else. Our betters seem not to understand the very basics of human nature – humans respond to incentives. So they continue to cobble together more and more feel good projects (i.e. they make the “elite” feel good) that backfire. Why? Because humans respond to disincentives as well – and their feel good projects are long on disincentives, something they can’t seem to wrap their heads around.
By design, the next example of that will take place after the November mid-term elections:
Starting this year, the United States’ working population will face three major employment disincentives resulting from the very benefits the Affordable Care Act (ACA) provides: (1) an explicit tax on full-time work, (2) an implicit tax on full-time work for those who are ineligible for the ACA’s health insurance subsidies, and (3) an implicit tax that links the amount of available subsidies to workers’ incomes.
A new study published by the Mercatus Center at George Mason University advances the understanding of how much these ACA taxes will reduce overall employment, and why. It concludes that the reduction will be nearly double that projected by previous analyses. Labor markets ultimately will reduce weekly employment per person by about 3 percent—translating to roughly 4 million fewer full-time-equivalent workers.
4 million more jobs in an economy already suffering one of the lowest labor participation rates in its history. Why have “middle class” wages stagnated or dropped? One major reason has to do with disincentives like this. Its like the $15 minimum wage trope. Force it on business and they have a “disincentive” to hire people for jobs that aren’t worth that and an incentive to automate or go short handed and double up the work on someone else.
That’s precisely the type of disincentive that ObamaCare is about to inflict on the economy. We’ll then hear the usual nonsense about greedy and uncaring companies and how the “market” has failed us. It is as predictable as the next blizzard being somehow blamed on global warming.
Meanwhile, these 4 million that may join the currently unemployed are real people who will suffer real problems because of the disincentive provided by a very poorly thought out law that won’t effect those who passed it. All Democrats can hope is that enough people will drop off the unemployment roles by the time the next presidential election rolls around that the fudged unemployment stats look acceptable.
What a hell of a way to run a railroad.
ICSC-Goldman reports weekly retail sales rose 0.1%, and rose 3.9% on a year-over-year basis. Redbook reports retail sales rose 5.4% on a year-ago basis.
Gallup’s Economic Confidence Index rose 1 point in September to -15.
Consumer credit rose a lower-than-expected $13.5 billion in August, as revolving credit slipped to $0.2 billion.
The Bureau of Labor Statistics reports that 248,000 net new jobs were created in September, with the unemployment rate falling to 5.9%. Average weekly hours rose to 34.6 hours from 34.5 hours, while average hourly income was unchanged at $20.67. All good so far. However, 97,000 people left the labor force last month, sending the labor force participation rate down -0.1% to 62.7%, the lowest since February of 1978. That means that 8,609,000 people who would have jobs with a historical participation rate average of 66.2%, do not now have jobs. In real terms, the unemployment rate is actually 10.87%, based on the historical labor force participation rate.
The US trade deficit fell by $400,000 to $-40.1 billion in August.
The Markit PMI services index for September fell -0.6 points to 58.9.
The ISM non-manufacturing index fell -1 point to 58.6 in September.
The JP Morgan Global Composite PMI fell -0.2 points to 54.9, while the Services PMI fell -0.2 points to 55.3 in September.
Challenger’s count of layoff announcement totals 30,477 in September, the lowest since June 2000.
Gallup’s U.S. Payroll to Population employment rate fell a slight -0.1% to 44.8% in September.
Initial weekly jobless claims fell 8,000 to 287,000. The 4-week average fell 3,750 to 294,750. Continuing claims fell 45,000 to 2.441 million.
The Bloomberg Consumer Comfort Index fell -0.7 points to 34.8 in the latest week.
The Fed’s balance sheet fell $-8.8 billion last week, with total assets of $4,493 trillion. Reserve bank credit fell $-9.9 billion.
The Fed reports that M2 money supply fell by $-10.0 billion in the latest week.
September motor vehicle sales fell a sharp -6.3% to a worse-than-expected 16.4 million annual rate. The domestic sales rate was 13.2 million annualized. September faced a tough comparison to a very strong August, but sales were expected to be stronger.
ADP’s estimate for private payroll growth for September is 213,000.
Markit’s PMI Manufacturing Index for September fell just -0.4 points to a still-strong 57.5.
The ISM Manufacturing Index fell -2.4 points to 56.6.
Construction spending fell -0.8% in August after a 1.2% increase in July. Market expectations were for a 0.5% increase. On a year-over-year basis, spending rose 5.0%.
The J.P. Morgan Global Manufacturing PMI edged down -0.4 points to a still-positive 52.2.
Gallup’s US Job Creation Index reached a six-year high of 30 in September.
The MBA reports that mortgage applications fell -0.2% last week, with purchases unchanged, but refis down -0.3%.
ICSC-Goldman reports weekly retail sales fell -0.2%, and rose 3.6% on a year-over-year basis. Redbook reports retail sales rose 4.3% on a year-ago basis.
The S&P/Case-Shiller 20-city home price index fell a sharp 0.5% in July, the steepest drop since November 2011. This is the third straight monthly decline. Once again, the numbers from the housing sector show a lot of weakness. On a year-over-year basis, the index is up 6.7%.
The Chicago Purchasing Manager’s Index fell 3.8 points in September to 60.5.
The Conference Board’s consumer confidence index in fell sharply from 92.4 to 86.0 in September.
The State Street Investor Confidence Index rose 1.1 points to 123.9 in September, on rising confidence among European institutional investors.
The Financial Times [subscription] is reporting that the US is poised to become the world’s largest producer of liquid petroleum (oil and natural gas liquids):
US production of oil and related liquids such as ethane and propane was neck-and-neck with Saudi Arabia in June and again in August at about 11.5m barrels a day, according to the International Energy Agency, the watchdog backed by rich countries.
With US production continuing to boom, its output is set to exceed Saudi Arabia’s this month or next for the first time since 1991. […]
Rising oil and gas production has caused the US trade deficit in energy to shrink, and prompted a wave of investment in petrochemicals and other related industries. […] It is also having an impact on global security. Imports are expected to provide just 21 per cent of US liquid fuel consumption next year, down from 60 per cent in 2005.
The reason? Fracking. As Walter Russell Mead points out:
With productivity continuing to rise, the United States has a chance to become the single biggest producer of crude oil sometime in the near future. If you had said that a decade ago, you would’ve been laughed at and called a fool. What a difference fracking makes.
Indeed. The “peak oil” pundits were sure we were on the precipice of running out of oil. Now, it seems, the sky is indeed the limit. Which is why it makes little sense, given the state of climate science, that our President is busily engaged via the UN and other domestic agencies, in throttling back one of the most economically viable growth engines the American economy has at the moment (and for the foreseeable future).
Instead of working on a policy to limit future use of hydrocarbons, this White House should be pushing a policy that helps us safely and sustainably exploit these assets for all. Additionally, while petroleum is indeed a global commodity, this level of production would go a long way toward the promise of energy independence in time of crisis. It helps remove oil as a weapon of choice by various less than friendly states and allies of convenience.
Two winners for the US: economic growth and national security.
Instead we get an attempt to establish an new tax based on specious science.
Sort of par for the course, no pun intended.
Personal income rose 0.3% in August, while personal spending rose 0.5%. The PCE Price index was unchanged overall, but up 0.1% at the core level. On a year over year basis, personal income rose 4.3%, spending rose 4.1%, and the PCE Price index rose 1.5% at both the headline and core rate.
The pending home sales index for August fell 1.0% to 104.7, as the housing sector remains stubbornly flat.
The Dallas Fed general business activity index for September rose 3.7 points to 10.8, while the production index rocketed from 6.8 to 17.6.