After finding out that Census made up some of the employment report feed data do you believe this report? Because if you do October was a good month on a retail level.
The U.S. Census Bureau announced today that advance estimates of U.S. retail and food services sales for October, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $428.1 billion, an increase of 0.4 percent (±0.5%)* from the previous month, and 3.9 percent (±0.7%) above October 2012. Total sales for the August through October 2013 period were up 3.9 percent (±0.5%) from the same period a year ago. The August to September 2013 percent change was revised from -0.1 percent (±0.5%)* to virtually unchanged (±0.3%)*.
Looking at the detailed data gasoline was pretty-much flat (and given the decrease in gas prices this translates in a material increase in gallons sold) and sporting goods were down -- but everything else had a solid increase on an unadjusted basis.
Make of it what you will; the market liked it although the reaction was muted.
I'd love to see how they explain this one, given what we know has happened with Brosurance premiums.
The Consumer Price Index for All Urban Consumers (CPI-U) decreased 0.1 percent in October on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 1.0 percent before seasonal adjustment.
The decrease was due to a large fall in energy prices which is considered to be ~10% of household expenditures. The monthly decline was 4%, which translates into enough to make the aggregate negative.
Ex food and energy the figure was +0.2%.
But here's the lie factory at work once again:
Up only 1.9% on the year and down 0.4% on the month -- never mind being only 0.659% of the family budget?
That's the real headline, by the way.
Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- increased at an annual rate of 2.8 percent in the third quarter of 2013 (that is, from the second quarter to the third quarter), according to the "advance" estimate released by the Bureau of Economic Analysis. In the second quarter, real GDP increased 2.5 percent.
And here's why not.
The Fed is "creating" $85 billion a month in "QE", injecting it into the economy. These funds are immediately spent and thus "count" in GDP (all goods and services sold, remember?)
So the actual amount of economic activity for which trade occurs must have the QE amount subtracted back out.
The BEA's GDP tables tell us that the gross change in GDP from 2Q -> 3Q was $196.6 billion. But the Fed's QE program injected $255 billion, so in fact the economy shrank during the 3rd quarter.
When people tell you that they believe the economy is in a recession, as a recent survey said was commonly believed -- they're right.
New orders for manufactured durable goods in September increased $8.2 billion or 3.7 percent to $233.4 billion, the U.S. Census Bureau announced today. This increase, up five of the last six months, followed a 0.2 percent August increase. Excluding transportation, new orders decreased 0.1 percent. Excluding defense, new orders increased 3.2 percent.
Transportation equipment, also up five of the last six months, drove the increase, $8.4 billion or 12.3 percent to $77.0 billion. This was led by nondefense aircraft and parts, which increased $6.9 billion.
Or is it?
An interesting internal point on this report is that computer and comms both had a strong new order number this month, and the curve is in that direction (that is, the three-month trend is increasing for both.)
The market is being a bit stupid about this figure, I suspect -- the TNX down in yield (10 year bond futures up) while the market is softening a bit.
I kinda like the leading edge of this report, although this is pre shutdown -- and given that, the reaction, while fairly modest, is rather illogical.
One wonders -- is the market really all "moar Fed, all the time"? Because if it is, and this report is being read as "Fed will leave", then you better watch out because the pile-on that will come from that is going to surprise in a way that few if any are ready for.
Since all that matters is Congress spending money it does not have, thereby destroying the consumer and expanding entitlements, that The Richmond Fed index failed to show continued strength should not surprise.
Manufacturing in the Fifth District remained weak in October, according to the most recent survey by the Federal Reserve Bank of Richmond. Shipments, capacity utilization, and the backlog of orders declined. The volume of new orders flattened, while vendor lead-time rose. Finished goods inventories and raw materials inventories also increased in October. Although the average workweek was little changed, manufacturing employment picked up slightly and average wages continued to grow.
Yeah, yeah. A diffusion index of "1", up from "0", isn't exactly inspiring. Shipments were down, backlog is deeply negative and capacity utilization is also negative. At the same time Vendor Lead Times are growing, which is only good when it leads to expansion, and I see no evidence in the other figures that it is.
What's worse is that the prices-paid to received spread widened, which indicates a strong destruction of pricing power.
Activity in the broad service sector grew modestly in October, according to the latest survey by the Federal Reserve Bank of Richmond. However, retail revenues declined, even as shopper traffic increased. Big-ticket sales also dropped this month while retail inventories remained flat. At non-retail services firms, revenues rose more slowly than a month ago. Survey participants were restrained in their outlook for business prospects in the six months ahead.
The real problem with retail is that sales revenues dropped with big-ticket (think washers, dryers, etc) sales falling through the floor to -21 from 12. Traffic may be up but purchases definitely are not on the large, high-margin items.
The rest of the report looks samo-samo, basically, but that big ticket number is not good and yet where do you think durables come from? Uh, yeah.
That was good for another six points on the SPX, however in what looks like a "buy anything" sort of response -- never mind that you, the ordinary person, can't because you have no free cash flow with which to do it.
Where We Are, Where We're Heading (2013) - The annual 2013 Ticker
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