Friday, October 14, 2011

Friday Data Points: Nothing to Suggest Double-Dip

1. Mortgage rates rose back above 4% this week to 4.12% for the 30-year fixed rate, up from last week's historic low of 3.94% and reaching the highest rate in five weeks.  

2. Loaded export containers leaving the L.A. Port in September increased by 26.6% compared to a year earlier, which was the largest annual gain for any month since early 2010.  On a year-to-date basis, export volume in 2011 is 13.6% ahead of last year, and at the highest-ever level for January-September exports in L.A. Port history.  Loaded inbound containers (imports) in September were essentially unchanged compared to last year.

3. Weekly rail traffic continued showing gains, with carload rail traffic for the week ending October up by 2.1% compared to the same week last year, and intermodal rail volume up by 2.4%. This was the third straight week of increases for both carload and intermodal shipments over the comparable weeks in 2010. As a leading indicator of future economic activity, the ongoing gains in weekly rail shipments will translate into higher output and production in the coming months. 

4. Retail sales in September increased 7.9% above the same month last year, and by almost 4% after adjusting for inflation.  Motor vehicle sales were especially strong in September, with gains of 3.6% versus August, and 8.5% versus September 2010.  September sales in 15 out of 16 individual categories were above their year-ago levels, and only the category "electronic and appliance stores" had flat September sales with no gain from last year.   

Commentary from Scott Grannis: "Today's retail sales number is one more in a growing list of statistics that have thrown buckets of cold water on the notion that the U.S. economy is sick and about to slip into another recession."

And from Brian Wesbury and Bob Stein: "Today’s report on retail sales killed any remaining chance that the U.S. is in recession. The data speak for themselves."


At 10/14/2011 2:34 PM, Blogger Bill said...

Yet the ECRI index continues to drop. I suppose if we go into recession in 1st or 2nd quarter of 2012 then ECRI will still be respected?

At 10/14/2011 2:36 PM, Blogger morganovich said...

how about household income?

it's fallen more since the "recovery" started than it did in the recession.

there's nothing there to indicate a recovery. i realize that household size declines have skewed this figure over decadal timeframes, but not in the last couple years.

Using raw data available from the Census Bureau’s Current Population Survey (the unemployment survey used by the Bureau of Labor Statistics), Green and Croder concluded that monthly median household income, adjusted for CPI-U inflation, fell by 9.8% from the official beginning of the recession in December 2007 through June 2011. This is near-depression territory (see the definitions section of the Hyperinflation Special Report (2011)). Further, the collapse in household income accelerated after the purported end of the recession in June 2009, suggesting that the recession never really ended.

Per Green and Croder, “Real [adjusted for inflation] median annual household income has fallen significantly more during the economic recovery period from June 2009 to June 2011 than during the recession lasting from December 2007 to June 2009. During the recession, real median annual household income fell by 3.2 percent, from $55,309 in December 2007 to $53,518 in June 2009. During the economic recovery, real median annual household income fell by an additional 6.7 percent, from $53,518 in June 2009 to $49,909 in June 2011.”

At 10/14/2011 2:39 PM, Blogger morganovich said...

also: the retail sales number was largely an artifact of seasonal adjustments. take them out, and 60% of the growth goes away.

consumer credit and confidence are also quite low.

On the consumer credit front, the Fed’s reporting of August 2011 consumer credit outstanding showed a 1.9% increase versus the third-quarter 2010 level. That also is less than the official annual increase in consumer inflation of 3.8% (CPI-U) to 4.3% (CPI-W) in August. Net of consumer debt held by the federal government, however, nominal August consumer credit was down by 3.1% over the same period. The banks still are not lending, and without credit expansion available to the consumer to make up for the shortfall in his or her living standards, real consumption and GDP again have no prospects for sustainable expansion.

As to consumer confidence, both the Conference Board’s confidence measure and the University of Michigan’s sentiment measure remain deep in territory usually not seen outside of historical recessions (except for the current period, where, again, the 2007 recession really never ended).

small business confidence is even worse and the unemployment numbers (especially u6) look like the recovery never really happened at all.

At 10/14/2011 3:03 PM, Blogger Marko said...

Would it really be a double dip if it were to happen this long after the end of the last recession?

I suppose they could say it started a year ago, hate when they do that.

At 10/14/2011 3:23 PM, Blogger Eric H said...

"small business confidence is even worse and the unemployment numbers (especially u6) look like the recovery never really happened at all."

See, nothing to suggest a double dip if you don't leave the first one.

I suppose repeating "the recession ended in 2009" eliminates the ability to call it a depression.

At 10/14/2011 3:26 PM, Blogger geoih said...

Prices up, wages flat, spending up, stocks up, housing prices still down, investment yields non-existant, unemployment still high. Sounds like Bernanke is finally getting some air into that balloon. Ought to last about 6 months, if he's lucky. Less if he doesn't keep pumping or if Europe implodes.

Yeah, everything is fine.

At 10/14/2011 4:27 PM, Blogger Don said...

Eric H.: I think you hit the nail on the head.

The "recovery" is just a climbingup a local maximum. If that valley is big enough, it like a plateau.

But I'm a laymen, so what do I know :^).

At 10/14/2011 10:52 PM, Blogger juandos said...

As seen on Zer0Hedge: Is the US Economy in a Recession?


I have developed an indicator that correlates nicely with past recessions, and it is suggesting a high probability that the USA is currently in a recession. The indicator uses readily available data. The first data point is the price of the SP500. The second data point comes from the weekly leading economic indicator published weekly by the Economic Cycle Research Institute. The third data point comes from the Chicago Federal Reserve, and this is the Chicago Fed National Activity Index (CFNAI), which is constructed from 85 data inputs itself. These three data points generate my simple recession indicator, which goes back to the start of the ECRI and CFNAI data series in 1967.

(there's a bit more)

At 10/15/2011 11:05 AM, Blogger Buddy R Pacifico said...

Is the "Sluggish Economy" the enduring growth economy? Previous deep recessions have been followed by snapbacks in growth, but not this one. Maybe this is the new normal of lean companies, with trim human and production assets, that avoid wide fluctuations in these assets. If there is some growth in the sluggish economy, then where is it?

Exports. Scott Grannis has a post titled Export Growth Continues Strong.

Mr. Grannis shows that 14% of U.S. GDP is now Exports. This compares with less than 10% in 2001.

At 10/15/2011 11:57 AM, Blogger bix1951 said...

median income is not all it's fracked up to be
I would be more interested in aggregate income
not to mention the possibility of new debt to buy all those automobiles people need.
and there is also a healthy underground economy where lots of cash sloshes around
I would not really trust statistics
nor anecdotes
only my own personal experience
which tells me things are looking good


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