Tragic Trifecta: Initial Claims Soar, Housing Starts Plunge, CPI Below Expectations

Tyler Durden's picture

We didn't really need a confirmation that the economy was deteriorating and completely disconnected from the "market", but we got it nonetheless. First, Initial Claims coming at 360K, on expectations of 330K, the worst print and worst miss in six weeks, confirming that weekly data is largely noise and that there is no sustainable downward trend. The May 11 weekly print adjusted and unadjusted were 360K and 318K respectively, virtually unchanged from a year ago at 373K and 325K, showing that in one year there has been essentially no progress, and that weekly initial claims of 350K is the new normal. Of course, the last week's print was also revised higher from 323K to 328K, while initial claims also missed expectations of a round 3MM print, instead printing at 3009K.

The second negative economic number came from Housing Starts, which plummeted from a downward revised 1021K to just 853K, well below expectations of 970K, the biggest miss since January 2007 and validating the data we have shown previously in the collapse of lumber prices. So much for the "that" recovery too. The silver lining - the "no capital requiring" housing permits which rose from 890K to 1017K, which as all hedge funds know, is the easiest way to game interest in the system.

Finally, confirming that the Fed's transmission channels are completely broken, and yet paradoxically giving Bernanke even more green light to continue building up future inflation and more QE, was CPI data, which declined from -0.2% to -0.4% in April, the worst MoM drop since December 2008 despite the monetary pumpathon from the Fed and BoJ. This is the second monthly miss in a row (and fifth of the last six). The YoY figures also misses +1.7% relative to a 1.8% expectation (ex Food and Energy) - also the lowest print since June 2011, although not very unexpected in light of the previously reported weak PPI data.. Much of the driver for this drop MoM and YoY are from a 4.3% drop in Energy prices MoM. That said, CPI would have been +0.1% if it was not for gasoline. Of course the bad is good mantra is in full swing as lower inflationary prints are providing ammunition for doves to push for more QE to defend their inflation goal. We wonder just how quickly oil prices will snap back once chatter of a taper is dismissed.


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GetZeeGold's picture



This must be like living in paradise.


Oh crap.....we just lost Chris Matthews.

Temporalist's picture

I just got a tingly feeling...all over...oooooo...ooooooo...

sodbuster's picture

I get that when I see pics of Kate Upton.

Headbanger's picture

I get that when I find some ammo to buy!

WayBehind's picture

Soaring unemployment? Must be some kind of mistake. Just ask those clowns at CNBC.

King_of_simpletons's picture

Bullish News ! Could not get any better.

" Economy is in early stages of recovery "

Sudden Debt's picture

Eversince I woke up, I was in the early stages of going to bed.

Dead Canary's picture

When I was born, I was in the early stages of dying.

aint no fortunate son's picture

should be good for another 100 point up day!

JimBowie1958's picture

DOW 16000!

This is fucking hilarious

Sudden Debt's picture



"all because of more ripples in the ocean than last month..."

"because outher space got bigger...."

"because every person on earth aged on average 1 month since last month"



insanelysane's picture

Maybe the BLS will start coming clean after the IRS fiasco.

Pool Shark's picture



Well, don't bother asking the Justice Department; Eric Holder "Just Doesn't Know:"


Clint Liquor's picture

This 'Recovery' is like going into a Intensive Care Unit and seeing a patient completely hooked up to life support (the FED) and having someone say they are recovering nicely.

LawsofPhysics's picture

In other words, this "data" means absolutely nothing as that 85 billion per month will simply become 120 billion per month, then 300 billion etc. etc. etc.  "Winning" -  End the motherfucking Fed already.

eclectic syncretist's picture

If the economy keeps tanking the Fed will have to print even more and then the equity markets will skyrocket like there's no tomorrow.  It all makes perfect sense, in a George Castanza Bizarro World, that is.

mayhem_korner's picture



My two cents...would replace "if" with "as". 

TrumpXVI's picture

Or watching a Frankenstein movie.

"It's ALIVE!"

NoDebt's picture

He's worse than dead, Jim.  His brain is gone!

W T F II's picture

"Collaborators" and "Apologists" always run eventually. I guess Matthew's over/under on direct-implication felonious scandals ending right insdie the Oval Office is 3 1/2...Afterall, there IS a limit to tolerance.

azzhatter's picture

Obama must not have let Matthews blow him last night. Sounds like a spurned cum guzzler

azzhatter's picture

The useful idiots in the press starting to realize they ain't in the club?

yogibear's picture

Useful tools. Otherwise Eric the Placeholder sends his Just-Us goons over to rough them up.

PiltdownMan's picture

Someone has to watch Chris Matthews which I have given up doing.

Lower starts, lower "inflation," higher initial jobless claims. Here comes da Fed? Again??

Pool Shark's picture



Biggest month-over-month drop in CPI since January 2009:

buzzsaw99's picture

You can tell from the price action of TIP that a bunch of money knew that two weeks ago.

scatterbrains's picture

yes and lumber and gold and silver etc.  but notice how with the news now out of the way gold is holding firm and being re-accumulated.

gatorengineer's picture

more stimulus needed, no sign of inflation, load the paper..........

Jdog's picture

yeah, with all these negative news, the Dow should pop another 2000 points! keep in coming! Ben will be printing $200 billion a month by Christmas!


Headbanger's picture

The horror...

Commencing final implosion countdown...  10, 9, 8...

I Am Not a Copper Top's picture

Nope - market will yawn, that is until Europe Close, then to the moon!  Fuck You Holder!

kridkrid's picture - One of the best scenes in the movie... didn't make it into the original, but added in Redux.

Sach Mahoney's picture

This is all very bullish.  Well done.  Crank up the printing press Ben.  

Doomer's picture

Yep.  The taper is now off the table (although it was ever really on the table).  Rally On!

BurningFuld's picture

Everyone please look at what happened to the stock market in Wiemar Germany when they turned on the printing press. Stocks just "may" protect you from the coming Currency Apocalypse.

optimator's picture

And be sure to look at what happened to the gold Mark!

Edward Fiatski's picture


There goes the angle that housing will get the economy out of the where it currently is.

insanelysane's picture

It is just too sunny and warm to build houses.

akarc's picture

Yepper, who could have predicted glaciers in Florida

Mr. Magoo's picture

Yup, gold and silver down again, time to BTFD

CrashisOptimistic's picture

The clear evidence of relentless deflation/eroding GDP growth is not good for gold.

Temporalist's picture

But my rations of chocolate went up right?

buzzsaw99's picture

Yes, because after torture you must really love big brother.

Temporalist's picture

It is quite clear that the Doomers at ZH are unappreciative of the great beneficence that is The Amazing Bernank.

insanelysane's picture

Some people just don't appreciate having sunshine blown up their arse every day.

Doomer's picture

And understand that there is no such thing as a free lunch.

Of course, the banksters aren't afraid to steal our lunch money, so they do get their lunch for free.