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US Recession Imminent - Durable Goods Drop For 5th Month, Core CapEx Collapses
Durable Goods new orders has now fallen 5 months in a row (after revisions) flashing a orangey/red recession warning.
After 2 weak months, Durable Goods bounced more than expected in June (+3.4% vs +3.2% exp) - though non-seasonally-adjusted dropped 3.1% MoM. But ex-Transports remain deeply in recession territory.
There was an unexpected drop in Capital Goods Shipments non-defense Ex-Air which fell 0.1% (against expectations of a 0.6% rise), but mosty worrying is that Core CapEx collapsed 6.6% YoY - the second biggest decline since Lehman.
We are going to need much more double-seasonal-adjustments to fix this data.
Charts: Bloomberg, ZH
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Deflation where? prices continue to rise especially at the grocery store, fees of all kinds are rising, housing is up across the board, utility companies are screaming for increased rates, where is this deflation many speak of?
Seems to me they want you to think deflation is setting in, well when prices start collapsing let me know cause all I see is prices rising, my wallet just told me so.
Deflation where? prices continue to rise especially at the grocery store
Thank you. I'm going to Walmart later....I'll try to report in.
Pack a lunch. Tell others where you are going and when to expect you back. Don't make eye contact. Stay away from the low-slung round ones on wheels. One of them lands on you and you're finished.
Good luck.
Time to raise intrest rates.
Don't make eye contact.
I'm gonna try that....sage advice.
Well, better cover your face, then, when you enter WalMart, for there be facial recognition cameras eye level,
that are tied to an NSA database. 80% of all Americans enter WalMart at some time. Which gives the FEDS plenty of data...
Brace for impact!
Vince: They got 22 ammo??
Flip the greeter at the door a Jackson.....you'll get some 22LR.
Virtually all ammo is dropping in price like a stone... once the old stock gets bought at previous levels (no one wants to take a loss and it's not like ammo goes bad very quickly). The last time this happened, this general economy was taking a shit... once the 2009 rally started to fade, prices decreased again until we had a mass shooting... when prices started to dip again, we got the xm855 ban talk, but not even that could abate the fall...
22 ammo of all sorts is available and sellers are still price gouging as much as they can (~$.10/rd). As supply/inventory stack up, prices will get back to their norms (~$.05/rd).
No idiot strings ?
"There's never been a better time then now ... to be in the upper 5%."
With plunging prices it musty be very sweet to be in the upper echelons with Bigger Bonuses then ever, Golden parachutes and Get-out-of-jail- free cards.
Hey No Debt, that was a LOL post - thanks!
Gas is down 5 cents over the last 6 months. For me, that's a $50 a year savings. Look out Vegas. Here I come.
And you're still being screwed gas should be a $1.50 a gallon @ $47 a barrel at best.
Its the size of the package, services provided and so forth that are deflating.
Less is more.
Our power has gone from 3.9 cents a kwh to 12.6 cents a kwh in the last 12 years, eggs now over 2.50 a dozenb blame bird flu, hamberger or beef forget it unless you find a good mark down and then it's still $5 to $9 a pound. Oh yes fees all kinds of fees going up DMV fees county permits up, property taxes and the list goes on and on. The only thing that I see deflating are silver and gold as well as oil, but the price at the pump is slow to come down.
Bird flu only has a little to do with egg prices. The big driver of egg price increases has been the California law requiring any producer that sells eggs in California to keep their hens in larger spaces. This increased the cost to the producers who were more than happy to pass that on. I read the other day that the forecast is for a 12% - 15% increase in egg prices over the next 12 months. $6.49 for two dozen at Costco the other day.
Pretty much all meat is up out here, although chicken has kind of held the line. Seafood, if you can even find it, is abslutely out of hand in terms of price increases. There was vitually no Dungeness crab season last year, and with most of the fisheries in Oregon and Washington under emergency closure (Fukushima, is that you?), it doesn't look like there will be much of a season this year. Not that I'd eat it.
But, yeah, inflation is running less than 2% a year. Uh huh. I guess if you remove food, energy and housing, it looks pretty good. But last I saw, people need to eat, they need to have energy to go to work and they need to have a roof over their heads.
Well,
look at the bright side,
medical costs are officially going down, except for insurance and other stuff,
and living quarters are getting less costly except for rents and houses.
But Inflation is good for us.
Con Edison in nyc charges double that12.9 pkwh. In Massachusetts Nstar now eversource is over20 pkwh. But everyone is converting to solar. There are solar panels everywhere now. Of course one can stay with antiquated power delivery andl keep getting raped by con ed or national grid
It's monetary deflation, which causes prices of some things to drop eventually, you talk about it first, see it in action later. gvt ability to fund it's self is inflationary, it always needs more money. Put 2 and 2 together to find, and solve, your problem.
Two more words that are losing any meaning, "Deflation" and "Inflation".
Everyday costs you pay to live aren't counted, and a in loss tangible value "good".
Where deflation is..............anything you go and buy is expensive as hell. Try selling it and it aint worth fuck. In other words, the fucks that are setting prices want to keep what they have and won't make cuts to adjust to the new shitville. Gravity will fuck them also eventually.
Unless you are putting steel, copper or oil directly into your shopping cart you won't see the decrease. By the time you see the finished product its been intermingled with rising taxes, health insurance costs etc.
This shit is becoming laughable. What the hell is going on that you cannot get a correct report and they need to come out with revisions daily?
Math is hard.
Common Core math is insane.....I can't do that crap.
I feel sorry for all those little kids.
Math is racist.
The adding and subtracting isn't too bad. But if you have to multiply or divide..., forget about it. Carry this number over here..., drop this number down here..., WTF!
They should find some way that computers could do that shit...
Math is hard. Lying is easy.
I think part of the problem is how the reports are issued and what they cover. It's more tilted for the market crunchers than the consumer in a lot of cases. First you have basic production of raw materials, like oil. We know oil is way lower than it was, and recently I saw $54.00 a barrel reported. That's like half of where it was at one point, because I surely remember it being over $100.00 a barrel. Yet, just two days ago I walked into the auto parts store to buy oil for an oil change. Holy crap! The cheapest oil I could find was like $4.00 a quart! What happened to the $2.19 a quart I was paying a few months back at the same store? So there's all kinds of contortions going on out there. It depends on at what level you are buying. I think the Chapwood Index is very useful on the consumer level. Shows there is a lot of cost being added by the middleman. It's what happens when companies can buy up lots of smaller companies and consolidate control, and therefore pricing of goods at the retail level.
Stange I have noticed the same thing. I used to buy bar oil for the chain saw 3.99 a gallon now 8.99 or more.
I see it in local restaurants especially, but I believe a natural response to lower demand is to increase prices... folks who require a particular revenue level to stay in business really don't have a choice if decreasing prices would make it impossible to meet financial goals. Further, everyone sees reports about how so many sales of luxury type items are obnoxiously robust... everyone is simply attempting to cater to a smaller and smaller demographic at more exhorbitant price levels. A large portion of the retail public is not remotely concerned about price increases... often enough, these are also the only people who are purchasing anything anyway.
You say a smaller and smaller demographic then in the next sentence you say a large portion of people not concerned with price increases so which is it.
Well, one is a measure over time, the other a present sense impression, so they're not mutually exclusive... Further, you're talking about apples and oranges; smaller and smaller numbers of people make larger and larger portions of the market (in terms of sales), due to the grinder we like to call the economy. [Interestingly enough, the same thing happens on the producer side of the transaction, given consolidation in a wide array of industries]. In addition, I thought it was without reasonable dispute that the general american consumer was... not particularly picky. Judging by housing, I would say not particularly price sensitive on many things either (especially large purchase decisions, e.g. autos, college, etc.).
Do you actually care to comment on the substance of my post? A counter observation perhaps? Any personal anecdotes?
This is the new normal in the Ukrainian States of 'Merika, formerly known as USA.
M-O-M says "raise rates"
Y-O-Y says "don't raise rates"
What's a Fed supposed to do?
Toss a coin
Kick a can.
Punch a fart box.
That's what I was originally thinking. Haven't seen that phrase around here in a while.
Chug a bottle of vodka?
Model glue...still the best bang for the buck.
Shit or get off the pot.
They seem to be in a pickle. Care to make a wager on whether or not we have NIRP in the future?
Fries with that ?
I've never seen the Fed so chicken to make a move. Normally they're the first ones to step up to the plate and make the wrong move at the wrong time.
No bet on the NIRP thing. Always knew we were heading that way, just thought they were going to attempt one more futile rate increase series before they slammed it to the floor again (and then into the basement). That's always been my reasoning behind the bet I'm going to lose to you.
The thing that scares me the most is not them making some arrogant, stupid policy move but that they might be seeing EXACTLY what we are seeing- they're stuck in a liquidity trap from which there is no exit. So they won't attempt exit. Ever.
We have been in a recession since 2008 if one uses accurate inflation data:
Let's not forget that US inflation numbers are completely fake - so real US GDP is much, much lower:
The Chapwood Index for 2014 was 9.7% and official CPI in the land of the free was only 0.8%. So the Nominal GDP of 5.6% for 2014 becomes real GDP of -4.1%.
The revised real GDP for years 2011 to 2013 worked out to -6.2%, -6.5%, -6.5% respectively.
What is the Chapwood Index?
"The Chapwood Index reflects the true cost-of-living increase in America. Updated and released twice a year, it reports the unadjusted actual cost and price fluctuation of the top 500 items on which Americans spend their after-tax dollars in the 50 largest cities in the nation."
http://www.zerohedge.com/news/2015-05-29/inaccurate-statistics-and-threa...
So QE while raising rates then?
how is it possible? Fraudster Yellen said the economy is improving didn't she?
She said this was transient now she can blame ot on Chinas stock market. Did you really think she would blame the federal Reserve for fraudulently detroying the US economy by feeding bankers free money?
We were recently told that new home sales were robust? Durable goods are things like refrigerators, washing machines etc. How could Durable Goods be so low if New home sales are robust?
Critical thought is not allowed. Bullshit Baffles Brains.
this is gonna take a doubleplusgood seasonal adjustment!
have we ever really left the last recession?
Of course not. Things are even moar shittier.
How long were sales robust? Here's one for you: Sell 200 homes one month, then 210 homes the next month, which is a 5% increase. Not bad. Then sell 10 homes one month, and 15 homes the next. That's a 50% increase. It sounds like gangbusters to the max, right? Except in example one you sold 10 more homes than the month before, and in example two you sold 5 more homes. Not only that, in the first example you built 210 homes, in the second case, only 15 homes. That's the problem with trying to track things in percentages instead of absolute terms. My friend's mom used to say "Figures don't lie, but liars figure".
Here are absolute and percentages....
.
New home sales dropped 6.8 percent to a seasonally adjusted annual rate of 482,000 units, the lowest level since last November, the Commerce Department said. May's sales pace was cut to 517,000 units from the previously reported 546,000 units.
Would really like to know where "non-seasonally-adjusted dropped 3.1% MoM."
The report shown unadjuted May at $220.7 billion and unadjusted June at 259.0 billion. That's NOT a 3.1% drop.
Can't see any other important subcategory showing that level of drop either.
here is the headline from marketwatch:
Durable goods orders rise 3.4% in Juneex-Transports
Ex-Transport unadjusted orders:
June - 169.126 billion
May - 155.055 billion
That's not a 3.1% m-o-m drop.
June 2014 ex-transports ($174.236) to June 2015 ($169.126) is a 3.0 percent drop but that's not "m-o-m." It's "y-o-y."
The mystery remains. Where is this -3.1 pct. m-o-m drop?
Come on, guys. Since the US and NATO occupied Ukraine and sanctioned Russia life is awesome.
http://russia-insider.com/en/must-read-article-ukraine-economic-abyss/ri...
German IFO up, US new homes up, durable goods up... Where is the recession?
Sure it is fuelled by cheap money... But for the moment, I don't see much of an issue... Am I missing something?
Am I missing something?
Trillions.
...would settle for a couple billions...
In due time....you'll be lucky to get millions.
There is deflation thanks to the Chinese dumping goods in the U.S, even with food prices going up. Look at electronics, prices have been going down forever.
This is all about getting Americans to take on more debt to keep it all from falling apart. There is nothing else left and the moment the Fed tries to raise rates, it all comes apart. Millions are buried in debt, including $1.2 T in student loans. The fools have been taking on longer and longer auto loans, buying bubble-priced houses, and buying more I-toys with plastic. The Fed is the great enabler, and they are running out of (bad) ideas. This will end exactly like the last Fed-induced bubble and the one before that. Home prices are unsustainable in the Wal-Mart economy. Silicon Valley has the largest property bubble in recorded history and when it goes, the whole country will feel it. For forty years high paying tech jobs have inflated prices and now the layoffs are accelerating. They are victims of their own technological efficiencies and cheap foreign labor. Try to make those huge mortgage payments on an $11/hr job flipping burgers.
What is left for the U.S.A? Millions sitting on the couch staring at Netflix movies while consuming mega-burritos from Chipotle. Then Googling for info so they buy more Chinese-made crap on Amazon with a few clicks of the mouse, before moving on to the newest You Tube video. There is no way back from this ‘New Normal’; we are too far gone. The banks cannot handle another meltdown and bailouts will be a much tougher sell this time.
The party is over and the meltdown in China is a direct result of Americans unable to take on sufficient amounts of new debt. There could soon be riots in China and even here, as millions are laid off. Our debt-driven, overcapacity auto industry will again crumble. They have stalled the final collapse with mountains of debt and the hope that millions of immigrants will somehow become new consumers and borrowers. Instead they just created even larger problems. Ninety-five million Americans were certain they were all going to get rich buying stocks and the Fed would protect them…wait ‘till they all panic. No way out of this…just a question of when.
You must use counter-intuitve logic for your protection.
Out of debt, I found a distressed home for 40K off the list price.
I'm paying cash.
BTW, the fact that China is going down has an inflationary effect, IMHO, as it drives prices up as a consequence of the "disappearance" of Chinese rock-bottom-price companies.
Off topic, but hey. Ha, red states - bring it!
http://www.bloomberg.com/news/articles/2015-07-27/these-10-states-will-b...
Interesting 'Punch & Judy' show going on here. On the one hand, you have essentially 'fabricated data'. On the other hand, you have a central bank - who is privvy to both the 'real' data and the fabricated series. The problem is that both are reaching a focal point of understanding, enough so that many market participants are beginning to notice. Obviously, the 'rest', who have long since taken notice of the rather strange dichotomy are of no consequence. This is not/will not be simply an issue of severe economic slowdown, this is a monumental breach of trust on many levels of officialdom. This is how nations dissolve.
They cannot hide the depression if rates rise.
We don't need to stink'in CapEx. We have bankers and lawyers and insurers and educators and government and healthcare and media and retail galore ... who needs CapEx?
My dishwasher only lasted 28 and a half years.