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More Q3 GDP Tremmors After Industrial Production And Capacity Utilization Both Miss

Submitted by Tyler Durden on 07/15/2011 09:27 -0400

The latest June economic datapoints in the form of Industrial Production and Capacity Utilization confirm the weakness is far more than just a soft patch: IP was up 0.2%, missing expectations of 0.3%, with the prior now having been revised to negative 0.1% from up 0.1%. Capacity Utilization was unchanged at 76.7% on expectations of a rise to 76.9%: this is what happens when the economy is still struggling with an inventory hoarding glut. And with inventories continuing to rise and being the only silver lining, expect these indicator to post further weakness well into Q3. Naturally, Japan is to blame once again: "In the second quarter, supply chain disruptions following the earthquake in Japan curtailed the production of motor vehicles and parts and restrained output in related industries; the production index for overall manufacturing was little changed for the quarter."

We keep waiting for that auto production-driven renaissance. And waiting... And waiting:

In June, the production of consumer goods was unchanged, with a decline of 0.5 percent in durables offsetting an increase of 0.2 percent in nondurables. Among consumer durables, lower production of automotive products; appliances, furniture, and carpeting; and miscellaneous goods more than offset a small gain in home electronics. Within consumer nondurables, the output of non-energy nondurables was unchanged; increased output of chemical products was offset by declines elsewhere. The index for consumer energy products moved up 0.8 percent, with gains in the indexes for fuels and for residential utilities.

And some more on utilization:

Capacity utilization rates in June at industries grouped by stage of
process were as follows: At the crude stage, utilization increased 0.2
percentage point to 87.2 percent, a rate 0.8 percentage point above its
long-run (1972--2010) average; at the primary and semifinished stages,
utilization rose 0.4 percentage point to 74.1 percent, a rate 7.2
percentage points below its long-run average; and at the finished stage,
utilization decreased 0.4 percentage point to 75.4 percent, a rate 1.9
percentage points below its long-run average.

And a pretty chart from SMRA to go with the data. Just a few more months until we get the positive to negative y/y inflection point:

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Fri, 07/15/2011 - 09:28 | 1459049 bankrupt JPM bu...

I blame the snow.

Fri, 07/15/2011 - 09:44 | 1459097 Cognitive Dissonance

Missed it by >that< much!

Fri, 07/15/2011 - 10:03 | 1459150 Djirk

Yo Benny, how did that QE thing work for ya. destroy the dollars and imports surge.

How about systematically writing off assets and investing in new industries.

Fri, 07/15/2011 - 10:00 | 1459140 wandstrasse

you cannot blame the snow! This summer snow was only transitory!

Fri, 07/15/2011 - 09:29 | 1459050 firstdivision

But, but, but...ISM was stellar....ISM said we recovered and are in a new golden age...

Fri, 07/15/2011 - 09:29 | 1459051 John Law Lives

The government needs to apply the Birth/Death Model in some form to every bit of economic data so they can simply fudge every bit of economic data.

Fire up the printing presses. QE for everybody!

Fri, 07/15/2011 - 09:30 | 1459053 snowball777

The slow-motion trainwreck of the Nth dip making its way through the supply chain.

Here it comes, bitchez!

Fri, 07/15/2011 - 09:35 | 1459062 RobotTrader

If the banks can start getting some mo-mo going, we could see 13,000 pretty soon.

Citibank, and JPM are up 2% already.

Even The Squid is green today.

Fri, 07/15/2011 - 09:36 | 1459071 firstdivision

Are you looking at your screen?

Fri, 07/15/2011 - 09:39 | 1459080 John Law Lives

He goes back and forth between viewing porn and stock charts on his mommy's PC. One day his mom will catch him with one hand filled with goo...

Fri, 07/15/2011 - 09:43 | 1459094 snowball777

And on the PC...will be a chart of Chipotle.

Fri, 07/15/2011 - 09:53 | 1459126 espirit

...at the library, lol.

Fri, 07/15/2011 - 09:42 | 1459091 snowball777

You're doing your part.

Fri, 07/15/2011 - 10:58 | 1459105 fuu

Well citi is up at least. So only 50% wrong today.

JPM only .32 from pre earnings price, almost filled that gap up yesterday morning.

C already filled it's pop-up gap and the dead cat bounce is starting to roll over.

Nomo momo

Fri, 07/15/2011 - 09:35 | 1459063 Cortez

Just blame "uncertainty" like the TH's on CNBC.

Fri, 07/15/2011 - 09:49 | 1459066 hedgeless_horseman

Planned economies are in contrast to unplanned economies, i.e. the market economy, where production, distribution, pricing, and investment decisions are made by the private owners of the factories of production based upon their individual interests rather than upon a macroeconomic plan.

http://en.wikipedia.org/wiki/Planned_economy

..............................................

Venezuela's Chavez creates agency to watch prices

He signed a decree to create a new "national system of costs and prices" that he said will prevent businesses from overcharging Venezuelans and ensure "fair prices."

"Speculation should end," Chavez said.

http://news.yahoo.com/venezuelas-chavez-creates-agency-watch-prices-210354280.html

..............................................

Argentina accused of muzzling economists

BUENOS AIRES, July 13 (UPI) -- Argentine President Cristina Fernandez de Kirchner is facing accusations her administration is seeking to muzzle independent economists for publishing data that runs counter to the government's version of key statistics on economic performance.

http://www.upi.com/Top_News/Special/2011/07/13/Argentina-accused-of-muzzling-economists/UPI-86431310586815/#ixzz1SBHwzYq2

..............................................

Obama's Petroleum Reserve Tap Could Snuff Out Speculators

“It will hopefully keep speculators from getting back in the market for fear that [Obama] could do this again,” said Daniel J. Weiss, a senior fellow at the Center for American Progress. "It is very important to burst this speculative bubble.”

http://www.huffingtonpost.com/2011/06/23/obama-administration-oil-reserve-tap_n_883572.html

Fri, 07/15/2011 - 09:49 | 1459110 snowball777

As if we needed more proof that thugs, lawyers, and thinktankers can't do economics.

Fri, 07/15/2011 - 09:53 | 1459121 hedgeless_horseman

In the 20th century, most planned economies were implemented by states that called themselves socialist. Also, the greatest support for planned production comes from socialist authors. For these reasons, the notion of a planned economy is often directly associated with socialism.

http://en.wikipedia.org/wiki/Planned_economy

Fri, 07/15/2011 - 09:56 | 1459132 espirit

Most Nato countries have a socialist government, in one visible form or another.

Fri, 07/15/2011 - 09:35 | 1459067 White.Star.Line

All reports from here on out will provide data that confirms that EASING is necessary.

Bankers say to BANK on it!

Fri, 07/15/2011 - 10:05 | 1459152 hedgeless_horseman

See my post above:

...administration is seeking to muzzle independent economists for publishing data that runs counter to the government's version of key statistics on economic performance.

Fri, 07/15/2011 - 10:17 | 1459206 White.Star.Line

Time to take Shadowstats offline?
Perhaps a little jail time for John Williams?

Fri, 07/15/2011 - 09:36 | 1459068 Dick Darlington

And equities up, surprise surprise. Chairsatan's darling and the other roach motels are pricing in the summer of love despite it's starting to rain even harder.

Fri, 07/15/2011 - 09:39 | 1459084 SheepDog-One

Everyone rattling bones of trouble and fear while QE3 gets priced in day after day.

Fri, 07/15/2011 - 09:46 | 1459102 qussl3

Its just the same old.

Earnings are good buy now!

QE3 on the way, buy now!

Bagholders being lined up now, if memory serves it took till earnings season winding down last time round before the doors were locked and someone screamed "FIRE".

Fri, 07/15/2011 - 09:51 | 1459117 fuu

Things still get priced in? With volume where it is and with HFT run amok I am surprised we still think anything is being priced at all.

Fri, 07/15/2011 - 10:09 | 1459179 hedgeless_horseman

See my post above.

...a new "national system of costs and prices" that he said will prevent businesses from overcharging...

Fri, 07/15/2011 - 10:13 | 1459191 SheepDog-One

Wow pretty stunning communism.

Fri, 07/15/2011 - 10:27 | 1459227 hedgeless_horseman

More like socialism, according to these experts...

Fri, 07/15/2011 - 09:37 | 1459072 Archimedes

I have nothing to add to this post. I am just here to junk Robo!

Fri, 07/15/2011 - 10:33 | 1459258 taraxias

PMSL

Fri, 07/15/2011 - 09:38 | 1459076 Cassandra Syndrome

I wish Bloomjerk would be honest

"Stocks Advance as woeful indicators infer QE3 and lots more bling, bling for Wall Street and the sycophantic corporate media whores like us, while the peasants starve in the midst of a hyperinflationary depression."

Fri, 07/15/2011 - 09:52 | 1459119 snowball777

Core CPI is up though....both woeful...and a needle for the QE3 camel to pass through.

Like sheeple to the slaughter...a bag for you, and a bag for you, and you, and you!

Fri, 07/15/2011 - 09:39 | 1459078 Cortez

duplicate

Fri, 07/15/2011 - 09:40 | 1459081 Cassandra Syndrome

Fri, 07/15/2011 - 09:42 | 1459089 tim73

This is so depressing, I cannot even bash Americans anymore. There is no fun in it anymore. Maybe I just have to find a new hobby.

Fri, 07/15/2011 - 09:43 | 1459093 Dick Darlington

And equities up, surprise surprise. Chairsatan's darling and the other roach motels are pricing in the summer of love despite it's starting to rain even harder.

Fri, 07/15/2011 - 09:45 | 1459099 snowball777

Yeah, you thought it was rain.

Fri, 07/15/2011 - 09:44 | 1459098 Archimedes

I have nothing to add to this post. I am just here to junk Robo!

Fri, 07/15/2011 - 09:46 | 1459101 Archimedes

Now I am junking myself for the duplicate post!

Fri, 07/15/2011 - 09:54 | 1459129 snowball777

Liar.

Fri, 07/15/2011 - 09:46 | 1459103 the not so migh...

Unusually unusual utilization

Fri, 07/15/2011 - 09:47 | 1459104 the not so migh...

Fri, 07/15/2011 - 09:49 | 1459111 Sudden Debt

BSE (Black Swan Event) to avert attention of te lemmings in 3...2...1...

Fri, 07/15/2011 - 09:53 | 1459124 RobotTrader

Bad news coming out virtually every day and they cannot sell stocks off much. I'm shocked we are up at 1,300 feels like the market should be trading at 950.

What happens if the news actually starts getting better?

Fri, 07/15/2011 - 09:53 | 1459125 Dick Darlington

Fear not, UMichigan will kiss all the bobo's away!

Fri, 07/15/2011 - 09:57 | 1459130 RobotTrader

Man, if you were in a dark room with no TV and just read Gerald Celente, General Jim, Paul Farrell, David Rosenberg, et al

I bet it would feel like the Dow was trading at 8,000 and crashing. With Black Swans flying around everywhere and banks stocks imploding to 3-year lows.

However we are still over 12,000 and companies like GOOG are hitting the ball out of the park. And crummy banks like WFC are still 300% off the lows.

Fri, 07/15/2011 - 10:15 | 1459201 SheepDog-One

General Jim kicking Robo right in the gut, lol.

Fri, 07/15/2011 - 10:02 | 1459146 foxmuldar

I know first hand about high inventories. Where I work we ran out of room to pack more inventories so now Im on a three week extended unpaid vacation. When I go back at end of this month, I'll be on a four day work week and if inventories haven't moved lower, a three day or even worse outlook ahead for me.

But don't worry, Google blew away the earnings expectations so all is well again. I wonder if Google is interested in buying a few hot water boilers. lol

Fri, 07/15/2011 - 10:03 | 1459148 docj

supply chain disruptions following the earthquake in Japan curtailed the production of motor vehicles and parts...

Which would just be sitting in dealer lots as nobody has any money and/or credit with which to purchased these fine new automobiles.

Which is, of course, bullish for stocks.

Fri, 07/15/2011 - 10:08 | 1459177 Atomizer

Its all my fault, I didn't eat my peas.

Fri, 07/15/2011 - 10:28 | 1459245 docj

Jimmah Cater gave us "malaise" (I think that speech was on this day in 1979, in fact).

The Telepropmter has given us "Eat your peas."

A sign of the degredation of this once great country is that many people now probably have to look-up the definition of "malaise" to get the point.

Fri, 07/15/2011 - 10:51 | 1459301 snowball777

"Go shopping!"

Fri, 07/15/2011 - 11:00 | 1459335 virgilcaine

"American labor may now look to the future with confidence". James J.Davis Secretary of Labor.

Aug. 29 1930

More Q3 GDP Tremmors After Industrial Production And Capacity Utilization Both Miss

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