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US economy: more questions than answers as data soften
Industrial output was flat for the second month in a row in March. This time Utilities output rose instead of falling as it had done in February. Once again Mother Nature and weather create ugly impacts on our data. This time MFG output fell in the month. MFG output is off by 0.2% in March compared to gains of 0.9% in Feb and 1.1% in Jan. On the face of it, that's nothing to lose any sleep over. It means that IP in MFG rose at a 10.5% annual rate in Q1. But it also means that the strength, the best of it, came from three-months ago, and that is not good.
So are we really weakening? Is it weather? Is it Europe?
Good luck untangling this mess of effects...
With Europe cooling down there may be some concern that we are getting backlash on US output from Europe's troubles. But, oddly, the answer to that seems to be NO, or at least, not directly. US consumption of consumer goods is doing fine, but it is not impacting US output of consumer goods on balance. Hard to blame that one on Europe.
Durable goods output for consumers is doing relatively well but non-durable goods output is weak- lower output/consumption by consumers of energy goods is just one reason. Much of the consumer durable goods strength in Q1 output, however, is from January output. That means we are losing momentum in the quarter itself.
Moreover the place where weakness in Europe should create its (WWF) smack-down is in capital goods, But it isn't. That category is looking solid and strong, with consistent increases in output for each of the last three months (admittedly a weaker gain in March, but a gain).
So there are no easy answers here...There are weather effects in the mix. We do have a European crisis to worry about. The bad weather trends do distort output trends but we also have some tough things to explain. There are no simple interpretations to the data this month in IP...
Between the erratic housing starts report and the sputtering industrial output report with its various headline and multi-layered trends acting in confusing ways, the one thing we can admit is that assessing the US economy is not so easy anymore. That nice period of unbridled strength has taken a backseat to the economy that raises question marks - again.
IP is only an indicator; it has no formal role in the construction of a GDP estimate. But its slackening pace is not good news.
Dr Jekyll meets Mr Hyde.
And it's just in time for the run up to the elections. Fancy that? So much for the notion that anyone has been cooking these data; they have just turned half-baked.
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Ditto Clowns on Acid
" the real market conversation of debt, money printing, and credit valuation?"
Leaving the insightless aspect of the post alone, looking at all the daily released reports and data is like driving in a snow strom; mesmerized by the cone of flakes hitting your windsheild, one has a tendency to forget where the road is. Any measurment of economic health, local, national or global, must take into account debt, the monetization thereof, and credit valuation.
Bobby - How you doin'? Seems like your valueless viewpoints are getting are getting shoved back up your discount window again.
I am amazed at the lack of depth or insight put forth in your offerings. Don't you lecture economics at some dipshit university like Columbia or something?
I am tempted to think that you are not writing these articles at all, but give them to your class to write as assigments. I mean how else could the contentg be so irrelevant and unimportant to the real market conversation of debt, money printing, and credit valuation?
Just askin'. Cheers.
Thanks for that.
How are things at junior college?
Dunno. I'll have to ask your students....
wow....
Your one fucking delusional puppy.
Go lay lay down....Brusca.
dropping off the 'F' word would be nice
Think of the current economy as a souffle ... it looked fine while basking in the heat of stimulus, but it was only half-cooked and could not support itself. Guess they're going to have to break a few more eggs.
Stolpered in the Brusca.
Hello to all you great people here.
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Ron Paul would be President now had he been just a bit more like his son Rand when it comes to foreign policy. I do not belive that the banking elite creatures could have held him back had he at least faked his stance internatinally, but yes - I know. Don't jump on me for that. Ron is not a faker in the least. I get it and understand that people of quality most often do not get elected to help the nation or any nation. Usually.
Wouldn't Ron lying just a little to get elected be far far better for the nation than this communist we have in the White House now?
If I had any hope that mankind could heal the earth, I'd vote for Ron. I haven't seen a sincere politician like him since.... well, Adams.
I watched his speech at the UM and it drew thousands of sincere people seeking an end of this corrupt political system and a return to the principles of the constitution. This man wears his own clothes and is not a product of engineered political science... bless him
lol....... yeah, Morticia Adams was pretty sincere.
Jefferson lose you with his land grab?
Shit on toast. Is this joker for real?
Where's the bread?
In a supposed article about US economic data you manage to drop 4 'Europes' in there. And not just any old 'Europe' but always craftily close to other words like 'crisis' 'cooling' 'weakening'. Wonderfully crafted as it all was, you went on for a cherry on top...
Subliminal messaging at its finest.
Has Brusca added ANYTHING to this board that is worth of Contributor status?????? We got rid of MadHedgeFundTrader thank God...........................Brusca should be next.
Thank you for your support and intelligent comments.
I think it's actually useful to have some contributors presenting the status quo because the real debate is between the orthodox economic explanations and the unorthodox. Otherwise we'd be preaching to the choir, and I do enjoy a good debate.
My big problem with Brusca is that he's a poor writer and it hurts my head trying to figure out exactly what he's trying to say. In that regard, I think MHFT was much better. Ilene pointed this out to him a few articles back, but it's probably difficult for someone with a Ph.D. to face the fact that expertise (in any field) means nothing if you're unable to effectively convey your ideas.
A piece of constructive criticism for Dr. Brusca: you might find a technical writing class useful.
I see what you mean. We have 'consumer goods. There is the consumption of those goods then the production of those goods and even the importation of consumer goods. Way too confusing and not contrarian enough.
I will do penance for this.
<shrug> Do with it what you will, but I'm not the only person who finds your articles convoluted and difficult to follow. Putting together a good argument is an art, and some are naturally better than others, although most of these skills can be learned to varying degrees. For example, I think Chris Martenson consistently makes good arguments, supports his premises with solid evidence, has conclusions that logically follow from the premises, and has a writing style that effectively conveys his message. There are many excellent contributors on ZH that share the above attributes.
In your post, you start with the thesis that "softening data" leads to more questions than answers. It's a thesis that is essentially unfalsifiable, and therefore a meaningless thesis. You provide various pieces of short-term data showing a lack of growth, but I don't think the conclusion is supported by the evidence. Weakening economic indicators are more likely a sign that Bernanke is failing to pump up another credit bubble, not that there are more questions than answers.
I would argue that seeking economic growth just for the sake of growth is pathological, and in fact, much of what counts as productive activity (e.g. arms exports, which do count towards GDP) are not productive at all, but are obviously destructive. There are many more examples I could draw upon, but this is as good an example as any that production is not necessarily productive. As for the consumption side, you seem to see consumption as an end in-itself, rather than the means to an end. I think that's equivalent to putting the cart before the horse.
Thank you.
I'll try harder.
The pieces consist of a succession of statements and qualifying counter-statements that amount pretty much to bugger all in aggregate.
MHFT was a f'n joke. His made up trades were always told to you after he cashed them out as big winnings. His egotistical name dropping and world traveling drivel could be made up by most posters on this board...........
Yet, like Goldman's research, it proved to be excellent contrarian advice..........
With all due respect, Bob... you're an imbecile shill.
Anyone not purposely trying to be misleading should have seen the shit hitting the fan ALL THIS TIME...
Now because the wind blows another direction you have a change of tune? C'mon!! You vacillate faster than Benny's hand while he jerks off to <crtl> P
LMAO!!
Keynes said when the data change, I change my mind- what do you do?
You have only one idea and its always the same?
Brilliant.
You and my broken watch.
Bob, you seriously need to rethink everything. I was a permabull for almost 30 years (as was everyone eating free lunch) until the shit began hitting the global economic fan blades in chunks and I decided to retire early... then central planning made a fatal <ctrl> P error, of which they will bring about the end of the entire system. I was astounded by what I learned and had to check to see if I was living the Twilight Zone. Yeah, it's that incredible.
Need a clue to what is coming and EVERYTHING you write about is nonsensical?
I posted a link in another comment to get you started but within the past 6 months we have the gubmint preparing for a total collapse and TEOTWAYKI...
You are not even close to being ready if you buy cooked numbers... what do you think "tyler" is here for? Rehashing trash?
yeah, the housing miss means this guy is full of shit.
Fuck off.
Brusca, didn't you state about 2 weeks ago that the data was improving ??
Now the data is softening ?
What gives ?
Give and take trends change.
Case for strength is not dead but is less consistent with the recent reports.
In a healthy male you see multiple softenings and hardenings every night, during REM sleep alone.
No telling what the daytime activities of a typical ZHer might add to the nightime tally of...unaided...hardening/softening cycles.
So if Brusca is only hardening and softening at a frequency of 1 cycle per month, then first off a hardening lasting longer than 4hours is alarming enough. I guess two weeks of hard would wear things out so badly that two weeks of soft is just what the ER doctor would order.
Wow!
He sure did! LOL. He was trying to make a case for a true recovery. That was 2 weeks ago though. In the universe of HFTs and Algos, that is an eternity. Was actually pointing him to look at LEI across the board. Maybe he did and he hasn't slept since. Rude awakenings are a coming.
The case for a strong recovery took a hit after the March employment report.
Data since then have been more uneven. I make the case the data point to. And that assessment changes.
It's what an economist does. That's different from some hack who in under some assumed tag just drops by to squirt their seltzer bottle at people who are serious and not dogmatic.
Happy squirting!
.
Everything that could have been pulled forward has been. We are now going to pay for our short term gratification that all is well in unicorn & rainbow land.
Forcing the markets up does not make the economy better, but its the productive side that makes the economy better. Ben Bernake is making a text book mistake in that he thinks the downside in the market led to the Great Depression, but rather it was the Great Depression that led to the collapse in the markets.
Were I a conspiracy theorist I'd say that the sudden weakness in the data had something to do with providing the justification for another bout of QE, but saying that would be just plain half-baked because we all know the Bernank does not lie.
Well, GS is not catching the wave this morning despite their "greatest" earnings.
You can just imagine the whining, wailing and gnashing of the teeth when Lloyd B. calls BB's cell phone.
Repeat this patriotic pledge:
Don't ask questions.
Don't question authority.
Don't bring up my rights.
http://www.sovereignman.com/wp-content/uploads/2012/04/propaganda_pledge...
I like that poster! Thanks for posting it Blue Horseshoe