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Core Durable, Capital Goods Orders Miss Despite Inventory Stuffing, To Push Q4 GDP Lower; Savings Rate Declines
So much for ending the year on a positive economic tone: today's November durable goods number, while better than expected on a headline basis including volatile transportation data coming at 3.8% on expectations of 2.2%, was a big disappointment when looking at the core economic indicators such as Durables ex-transportation and non-defense capital goods orders ex-transportation, both of which missed, 0.3 vs 0.4% in the former case, and a whopping 11st devs for the latter: at -1.2% on expectations of 1.0% (Joe LaVorgna was +1.2%... of course), the worst since January 2011. Simply said the trend of downward GDP revisions is now coming to Q4 GDP which will likely see the consensus dip below 3.0%. While we are at it, why not stuff channels a little more: "Inventories of manufactured durable goods in November, up twenty three consecutive months, increased $2.0 billion or 0.6 percent to $368.8 billion. This was at the highest level since the series was first published on a NAICS basis and followed a 0.4 percent October increase. Transportation equipment, also up twenty three consecutive months, had the largest increase, $1.0 billion or 0.9 percent to $114.3 billion." And in other news, both consumer income (0.1%, exp 0.2%) and spending (0.1%, exp 0.3%) missed, pushing the savings rate lower again from an upward revised 3.6% in October to 3.5% in November. The reason consumers had to rely on their savings? "Private wage and salary disbursements decreased $7.1 billion in November, in contrast to an increase of $37.2 billion in October." And yet, "Government wage and salary disbursements increased $0.1 billion in November, the same increase as in October." But that's ok - for a slow motion economic trainwreck there is Obama and fudged labor data from the BLS; for everything else's there's Mastercard and soon to be unlimited lines of credit for everyone drawn straight from the Discount Window.
and the ever impressive Bloomberg estimates screen now updated for our standard-deviation-based analysis of analyst uselessness...
Chart: Bloomberg
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Doesnt matter, the media is all over the news telling the sheep the economy is improving and that is what matters, not actual reports on the impending implosion.
Since when has the MSM ever told the truth, comrade? Go out and spend your life away on unneeded things for years of debt slavery.
The revolution will not be televised.
No, it will most likely be tweeted (until the govt shuts that down too).
I can't wait to be "Life Black". It's going to be great.
Plus, at some point, the credit cards stop working, right?
http://www.youtube.com/watch?v=jD3m71nVr1Y
It's Christmas..... buy buy buy. Or wait a day or two. THEN buy buy buy.
But, buy buy.
Once you've bought, you can re-hypothecate your iPad/pod/pooed.
Endless, infinite riches for all.
Gawd Bless us. hyper-hypothecate if you cannot just hyper- Hypothecate.
JPM is doing it. So can you.
Call it the ipad, the ipadspad, ipadspadspad.
ori
/the-plan/
You know, here in the Dominican Republic, I don't see ANY push to buy, buy, buy. It's only an American thing. What's more, it's only a TV and radio thing.
Turn off your TV.
'Turn off your TV.'
I was about to. Realized I don't have one.
Haaah! Me neither. Last 10 years essentially TV free.
I got my mind back. Gene, I can tell you did too.
Anyone who watches TV and says that they are un-affected by it's programming are fooling themselves. Like doing Crystal Meth and telling yourself and the world that you are 'above" being effected by it.
Turn Off your TV.
ori
ORI,
Some young(by my assumption) graffiti artist has created a modern masterpiece at a bus stop. It says: "TURN OFF THE TV, TURN ON YOUR BRAIN". I've heard a similar messages throughout urban areas in Europe.
We should get T shirts made with that phrase.
The image could be like that one that GW posted the other day of the TV on fire.
You gotta tell the wife (or husband) to turn off the TV too. Every other commercial screams "If he doesn't buy you a diamond (or other useless product - fill in the blank) for Christmas, then he doesn't love you." And I don't think she will accept gun ammo as a substitute.
I am honestly tempted to switch cnbc on today... just to see how they are spinning things these days.
Now why would you do such a thing? Spin is soul sickness...
The spin has been on-going imho since 2009. The MSM is doing everything possible to convince the public that there isn't an economic collapse happening right now.
Sheep don't move markets much, worry about whether the algos are fooled. The S&P is right up close to the down trend cap and just under the 200 dma. With the euro dropping it looks like a good candidate for bearish day-trading, not that I would do such a thing.
Core PCE rises 2.5%...wages supposedly rise 0.1% (though wages declined)..thus people were loosing 2.4% earned money value....Yikes!
Private wage and salary disbursements decreased $7.1 billion in November, in contrast to an increase
of $37.2 billion in October.
The personal saving rate -- personal saving as a percentage of disposable income -- was 3.5
percent in November, compared with 3.6 percent in October.
As the post noted...
And just last nite Rosenburg was writing about hw the savings rate had increased and it was a great 'tax break' with gas dropping to $3.30. Oh well, great time for some more rally market rises I'm sure.
OT: Banks should be rolling in the profits with their cost of "money" at +- 1% and credit cards interest at 24%. 2300% is quite the spread. Spendng by the 99% should be encouraged.
It is the season of buying crap for people you don't like with money you don't have.
Merry christmakah.
That is... Terrifying. He's clearly thinkin' to himself "Urine trouble"
And....absolutely no effect on 'markets', totaly broken as they are.
However, adjusted for inflation....
The stuffers have failed. They dont have the stuff to make it happen with Customers who have no money. for stuffing.
The one thing no one talks about is how importers and overseas factory is making to order only. Not in bulk or excess. Less product is brought in with greater times to stuffed stores.
A few days ago I ranted about JIT. They may as well go back to the old dock to dock model of the 50's because there is no longer a urgent need for JIT.
Let us not forget last week's storm that disruped the meat delivers.
Hmmm...channel stuffing...wonderin when/if I can get me a new pick-m-up truck for a buck.
Savings rate pathetic. Amazon, although overpriced with a PE of 90 now going to put another nail in the coffin of other retailers. The Amazon app compares prices easily while you are in BBY or Costco or wherever. How would you like to own a small business in this environment?
Train is moving slow but the wreck will not be avoided.
Oil almost back over $100. Yup, that is going to help.
Not all of the inventory build is channel stuffing. Sadly, some of the build is caused by well intentioned business managers who naively believe that the government statistics which they pay for the collection and presentation of, are being presented truthfuly and honestly. They didn't want to be caught short without inventory in the "improving" economy. Thank you BLS.
If they are well intentioned why aren't they reading ZH?
Or why do they believe the spin? Let them fail.
I'm sure the inventory is being stock piled because the Chinese consumer is right around the corner and about to open up their wallets to buy with both hands
Wait until the Chinese consumer is hit with failing property values. All those ghost cities and abandoned amusement parks should help.
Great! All economic numbers are lower than expected except one industry: aircraft. And much of that is for overseas sales. Personal Income and Spending Less Than Expected; Durable Goods Orders Up 3.8%
http://confoundedinterest.wordpress.com
One trick pony centrally planned economy!
Why save? The dollar will be worth 12% less next year then it is today...that's the recent trend.
To pull the Kenyan's chips out of the fire it will not even be about spin any more - it will be about outright bad being declared outright good.
Bad = Good, the operative equation of the Obama Era.
U3 down to 8.6%, not because people are getting jobs, but because they're so discouraged they're dropping out of the workforce. Outright bad being declared outright good.
Weekly claims dropping, but due to people rolling off of extensensions and exhausting their 99, and businesses so lean there is nobody left to fire - outright bad being declared outright good.
Americans are eating the principle of their life's work. Wages dropping, and more borrowing just to pay rent and buy food. Outright Bad = Outright Good. Ladies and gentlemen I give you Barack Obama, Ben Bernanke and the US Congress.