Bad Economic News Trifecta Hits: Jobs And Core Durable Goods Worse, Savings Rate Higher As Consumers Hunker Down

Tyler Durden's picture

The economic data dump is here. In order of appearance, first we have jobless claims which rose from an upwardly revised (of course) 391,000 to 393,000, worse than expectations of 390,000. That is Seasonally Adjusted. Not Seasonally Adjusted claims exploded by 74,214: good thing nobody looks at the unfudged number. The bleeds from the 99 week cliff continued as a net of 7K people dropped from EUC and Extended Claims. Next we have durable goods which while on the surface were better than expected declining by just -0.7% on expectations of -1.2% (with the previous month revised massively lower from -0.8% to -1.5%), the orders ex volatile non-defense and air dropped by a whopping 1.8%, on expectations of -1.0%, and the revised September number collapsing from +2.4% to +0.9%. This means that not only will the final Q3 GDP be revised even lower, but that Q4 GDP rebound hopes have been all but dashed. Finally, in Personal Spending data, we learn that consumers spent less, with spending rising only 0.1% on expectations of 0.3%, while income increased (thank you Uncle Sam) from 0.1% to 0.4% on expectations of 0.3%. This was to be expected: after all the savings rate in September hit 3.3% - the lowest since August 2008. It had only one way to go, and so it did, with the October Savings Rate increasing to 3.5%. Expect this number to keep rising as consumer finally re-retrench yet again, in the process hitting the economy.

Not Seasonally Adjusted Jobless Claims:

Savings Rate:

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arkady's picture

Total credit continues to contract, savings going up and yet talking heads are still contemplating whether or not a recession is coming? 
More like talking asses. 

SheepDog-One's picture

In a sane society, 'credit' contracting and savings going up would be GOOD news....alas, we're far from sane though.

Hard1's picture

WTF is going on today?  Bunds down, Treasuries down, Equities down, commodities down!!! I guess cash up

SheepDog-One's picture

.308 ammo price holding steady, I just checked.

papaswamp's picture

We'll see how much longer that will hold....

Hard1's picture

So is the lb. of turkey.

SheepDog-One's picture

Isnt that the real insane part as we see 'prices' of major commodities swing up and down 2-3% daily, depending on whatever rumor is floating around...insanity.

firstdivision's picture

Bernanke's pants are down.

Quinvarius's picture

Yep.  The banks need to deleverage their paper investments vs their paper assets.  And paper assets needs to deleverage vs gold.  The hilarity of watching the gold bull get sniped at by talking heads while it unfolds never fails to entertain.  They just want the debt bubble to continue forever with no foundation.

Clearly_Irrational's picture

"Savings" at a stable rate are good in general because they end up becoming investments which generally leads to increased productivity and more wealth to go around.  A change in the rate of savings can be bad short term unless it's accompanied by appropriate monetary policy otherwise it can lead to inflation/deflation.  Essentially savings represents a demand for currency and when demand changes things will be out of whack until they stabilize at the new equilibrium point.

mayhem_korner's picture



This is just the bullish news the market needed for a pre-turkey green day!

Roland99's picture

yeah...but saving what? If real earnings are down 1.7% from a year ago....


i-dog's picture

Can't be good for AAPL or NFLX....

TruthInSunshine's picture

The more that The Bernank pushes on a string (QE, ZIRP4EVER), the more people white knuckle their fiat. Oh, the irony.

It's all the snake eating its own tail.

The Bernank is DESTROYING the desire to consume, as he's freaking the world of savers and the presently liquid out with his absolute abomination of policies, while the non-savers and the majority who have difficulty getting credit have difficulty spending, also (given the banking sectors precarious-dead state of health).

Here is but one of many examples I can cite:  Mr. Smith, who is 78 years old, worked hard his whole life and retired with enough savings that would have, in an ordinary interest rate environment, have produced an income stream from interest on his savings, that would have prompted him to spend far more freely (he may even have already have replaced his 2001 Mercury Grand Marquis by now if not for the fact he is anxious due to his meager/non-existent interest ZIRP income).

So, Mr. Smith buys no new car, hires no one to put a sunroom on his (now radically depreciated home), and gets all of his grandchildren a lump of coal for Christmas this year.

All thanks to The Bernank.

SheepDog-One's picture

I for one am GLAD Bernank and the other Keynesian lunatics are destroying 'the desire to 'consume'...maybe people will snap out of being such mindless cud-chewing cattle and we could actually save the nation!

Its a remote chance, but possible.

Tsar Pointless's picture

No fucking way.

Give most Amerikkans the choice between the shiniest, newest iThingy or world peace, and I think you know what most people would pick.

No chance. Not possible.

SheepDog-One's picture

You know its funny, I know a couple 'newest gizmo' freaks at work who have told me they guess their old stuff is fine for now, and theyre not doing anything for Christmas except buying 'common sense' things for their kids. Uh oh, JM Keynes spinning in his grave.

TruthInSunshine's picture

They aren't buying the iPhone 4s2.0, dog?

LawsofPhysics's picture

The forthcoming capital controls and supply chain disruptions will take care of the consumption model regardless of the Fed moves.  To push on a string and insure the exponential mis-allocation of capital when there are so many very REAL problems with supply chains is beyond dangerous.  Well, at least the chaos theory folks will have lots of data to mull over in the nbear future.

RickC's picture

But, even worse, is Mr Smith still needs to eat, clothe himself, and heat/cool his home.  To do that he must spend some of his capital and that makes his problem a continuing problem that will last long past Bernanke.   The damage Bernanke has caused will live long after he is gone.  And, all that damage has produced no positive result unless you consider more pay off to the banks a positive result.  The Fed, owned by bankers, favors banks.  Who could have anticipated that.

TruthInSunshine's picture

+2 (extra 1 due to inflation - I had to go to the grocery store yesterday. WTF price of produce)

Captain Kink's picture

At least they got coal for Christmas...will come in handy come February.


Iam_Silverman's picture

"and gets all of his grandchildren a lump of coal for Christmas this year."

Ahhh, such a wonderful man!  I think that it is great that he has thought about his grandchildrens future by teaching them to invest in good, solid commodities such as coal!

LawsofPhysics's picture

I agree, and if he has enough grandchildren, they can keep the house warm and cook some soup.

Freddie's picture

Did 78 year old Mr. Smith vote for the muslim in 2008? 

firstdivision's picture

Oh my God!  Could it be?  My Christmas stocking is stuffed with QE3!

TruthInSunshine's picture



Have yourself a merry Bernank Christmas
Let your fizz pile grow
From now on
Precious will be out of sight

Have yourself a merry Precious Christmas
Make the banksters pay
From now on
real GDP growth will be years away

Here we are as in golden days
happy silver days of yore
Faithful friends who are dear to us
gather near to us once more

Through the years we grow stronger together
Non-dilutive fizz know the Fates allow
Hang a .999 silver star upon the highest bough
And have yourself a Precious Merry Bernank Christmas - now

SheepDog-One's picture

Its just insane, these people are Hopiuming that people go out and load up on cheap Chinese junk on credit? 

John Law Lives's picture

How long before The Ben Bernank announces ZIRP with no exipiration date...

How long before Congress extends unemployment benefits...

How long before another Keynesian fool claims a natural disaster is good for GDP...

100% FUBAR

SheepDog-One's picture

And just think, 3 straight years of all that to the max has gotten us right back here to the basement.

Iam_Silverman's picture

"3 straight years of all that to the max has gotten us right back here to the basement"

You mean you can't "borrow yourself rich" and then spend your way into prosperity?  Someone needs to re-write the economic rules here.

Andy_Jackson_Jihad's picture

If I was in the financial biz I would have already created an AK47 index and ETN around it.  This market is ripe for an Eric Sprott of guns, ammo and canned beans.

Andy_Jackson_Jihad's picture

That was supposed to be in response to the .308 comment...

Iam_Silverman's picture

"response to the .308 comment"

AK-47's don't chamber .308 (7.62X51), they use a medium powered round instead - 7.62X39.  And, the bullet diameter is .311 - important to know if you are reloading some (not that much of 7.62X39 is sold brass cased).

Blank Reg's picture

I'm going with .223 and 9mil

Iam_Silverman's picture

"I'm going with .223 and 9mil"

Those are both good choices, as they are what you are likely to find in your local National Guard Armory (along with 7.62 NATO).

jtmo3's picture

That's why the futures are off the low. Silly me, I thought this might be bad news. What the hell was I thinking.

Tsar Pointless's picture

That not-seasonally adjusted initial unemployment claims number is quite important, I think. It shows the true weakness that permeates in the labor force.

I suspect we will see more of these 400k-plus numbers as we end 2011 and begin 2012. You've seen the reports of all of the mass layoffs announced over the past few months.

As I mentioned on another thread yesterday, there will be several hundred more job cuts coming from BNYMellon alone between now and the first of the New Year. I likely will be among these "displaced" workers. The depression will finally hit me, after four years.

Yes, "Recovery Winter" is nigh. If you're sick of popcorn, might I suggest Cheez-Its?

Implicit simplicit's picture

There was a man from Winsocket

who liked to trade the eco. docket

he said with a grin as he sold the yen

I'll just keep the dollar in my pocket

LuisF's picture

Thanks to JPM I will run to sell of my physical gold! Hurry up!

Archimedes's picture

Well hopefully we will be seeing some CNBC folks on the Unemployment line real soon:

LuisF's picture

Thanks to JPM I will run to sell of my physical gold! Hurry up!

Stack Trace's picture

This market is levitated on the HOPE of QE3. PERIOD.

When this doens't manifest or by the time it does the market will have taken an epic dump. Guess this is bullish and we should all jump in like the rest of the mindless bulls for the FAUX Santa clause rally.


SheepDog-One's picture

DOW 11300 and people got a rally pre-priced in? I wouldnt touch any of it with a 100 ft pole even if futures were up 1,000 points this morning. 

TruthInSunshine's picture

I wouldn't touch it with Abby Joseph Cohen's penis, but then again, she sees "a lot more upside" than I do.

Quinvarius's picture

The portfilio of the hour is gold+silver+cash.  The last one is just a put on gold and silver.

Mitch Comestein's picture

Cash is up.  TMS2 running at 14.9% annualized.  What is a brotha to do in this environment?

Quinvarius's picture

Lots of money being printed.  Poor business environment.  Debt defaults.  You need cashier cash.