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First Q1 GDP Revision In Line With Expectations; Initial Claims Spike
And so the preparation for a disappointing NFP print continues. While the first revision to Q1 GDP came precisely in line with expectations of a 1.9% print, below the first GDP print of 2.2% (which was expected to print at 2.5% on April 27), it is largely irrelevant as it is backward looking. Instead, what matters is today's ADP miss, and the just released initial claims number which as we explained minutes ago has to come in bad to prepare us for a horrible NFP number tomorrow which in turn unleashed the NEW QE, $130 gas, and all those other things which made Einstein define insanity. Sure enough, initial claims printed at 383K, up from the upward revised 373K (370K before), which is a 13K miss of expectations. Continuing claims came at 3242K on expectations of 3250K, and down from an upward revised 3278K. What is odd is that in the week ended May 12 we did not see another weekly plunge in the 60-70K ballpark of those dropping off from EUCs and Extended claims, and instead the number was a tiny positive. Expect the sell-side brigade to cut its NFP forecasts in advance of tomorrow's number even more.
The revised GDP composition resulted in even lower quality growth, with PCE declining from 2.04% of the total, to 1.90%, or the entire number in itself, with government and imports detracting more from the overall number.
Biggest 2Mo rise in claims in a year...
20 of last 23 week's Initial Claims missed expectations to the upside (worse)...
Chart: Bloomberg
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... and the pre-market stock "rally" (well, it's really flat, but CNBC keeps calling it a snap back rally) holds ...
I guess there is just no stopping those exhausted sellers.
... but the 10 yr just dropped below 1.6 -- ouch
http://www.financialarmageddon.com/2012/05/now-ive-got-it.html
Now I've Got ItIn "What We Talk About When We Talk About Recession," Bloomberg reports on yet another survey where the majority of respondents view things differently than the so-called experts on Wall Street.
Do feelings trump facts for small business owners? Three years after the Great Recession ended, 71 percent of small business owners indicated they “believe the United States economy is still in a recession,” according to a survey (PDF) of just over 1,000 of them released today by U.S. Bank (USB).
According to Bloomberg, the disparity between what most people are seeing and what is "really" going on is a definitional problem, resulting from the fact that the average Joe doesn't really understand the economic lingo.
To economists, a recession is “a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales,” according to the National Bureau of Economic Research, which officially designates when a recession begins and ends.
That wonky definition doesn’t necessarily match how people perceive the economy, says Richard DeKaser, deputy chief economist at The Parthenon Group consulting firm. “It’s not uncommon to see these kinds of dramatic disconnects between experiences and perceptions,” he says. “Even though an economy may technically be expanding, as it has now for three years, most people feel the economy is in a recession if it’s operating below full employment” or its full potential.
The report also suggests that popular perceptions -- or rather, misperceptions -- about the state of the economy stem from a superficial and simplistic assessment of reality, made worse by sound-bite journalism.
Business owners’ view of the economy may also be colored by headlines about stock prices and unemployment that get more attention than the rather obscure calculations of turns in the business cycle, says Brian Headd, economist at the Small Business Administration’s Office of Advocacy. “What we see all the time are stock market levels and job levels,” he says. Neither the unemployment rate nor the S&P 500 have returned to their pre-crash levels, and Headd says many people think “my 401(k) isn’t back where it was yet, so it must be a recession.”
In sum, it appears, the reason why most business owners -- and most Americans -- believe the economy remains in trouble is because they don't have the same knowledge and skill set as the individuals who, as a group, failed to anticipate the worst financial crisis and most severe economic downturn since the Great Depression.
Now I've got it.
thanks for the links.
Any word on the revisions to the revisions?
Economists revise previous expectations of initial claims to 396K this week. Initial claims beat revised expectations by 13K from a soon to be upward revised print of 383K...I cant do this.
The US stock market is outrageously expensive compared to the rest of the world. Everyone else is hovering around 2009 lows. It is obvious the Fed/Treasury has been at work pumping the markets. And now the US stocks are so far out of whack they look like they have a set of police lights flashing on them.
How tiring is it to push sell on your computer keyboard??
The Fed is warming the presses....
The data is going to have to be much worse for the Fed to engage in QE, barring a Eurozone meltdown. Stock bulls are getting their hopes up for nothing.
The Fed is passing out money to banks right now. Don't wait for them to announce anything. They are too mindful of scaring people with the size of the numbers. Remember how how big the secret loans were that they admitted to under Ron Paul's Fed audit? Bigger.
Yes, but the reality is that the market has a Pavlovian response to official QE i.e., LSAPs. If there is no official QE, the markets will roll over.
You may not have noticed. The markets have already rolled over.
Not really, the best is yet to come, potentially June 18th...
I agree, we haven't seen them tank, but the trend has changed from the first four months of the year and we're firmly trending down. We haven't seen much volatility, just a slow steady decline. I do expect the volatility to rise in the near future, though, and we'll see those 500 pt swings again, and I believe, mostly to the down side. But I'm an optimist hold FB puts, so I'm biased.
you mean the swap lines....the presses are running full tilt covering half of each months govt deficit...
Anyone have the numbers on how many claims are denied?
Well, looks like futures are relatively unfased by this dose of reality. Haha.
Its surprisingly bullish, but what isn't nowadays
Richard Russell and Bill Gross now predicting "Armegeddon"
Which means a vicious rally is due in a matter of days.
You don't consider 383K a rally in the IJC? When you consider how few people are actually still employed, that's a pretty good rally in my book...
You mean like what happened to your precious Netflix?
arg, netflix. My learning-curve nemesis... got a call heading into 300 ... if only I had a Put to go with it. Too green at the time for options, hadn't even learned what a strangle or straddle is at the time.
The 10 year is announcing crushing deflation and there is simply no way to misinterpret that.
Global economic activity will fall, as it must with the fuel supply pinching relentlessly. The price of that fuel will fall as less of it is used, but the real lesson in this is that the party is over. There can never be growth again. That fuel price will explode any time you try to ramp up use of it.
As for QE, there is no need to buy bonds to drive the yield down when it's driving itself down. The global economy does not lack liquidity. It lacks fuel, and Ben can't print that -- and worst of all, it's likely that he knows that.
Keep chewing that doublethink gum.
As for QE, there is no need to buy bonds to drive the yield down when it's driving itself down. The global economy does not lack liquidity. It lacks fuel, and Ben can't print that
Interesting ... But he isn't printing to drive the yield down. He'll be printing because nobody but him will buy US Treasuries
He has never said that.
He has said he buys bonds to reduce the yield and stimulate the economy via the lower yield, which is the Occam's Razor reasoning anyone would expect.
There's clearly no point in it. The problem is one of physics. Not financial gobbledygook.
Pretty much although that 'never be growth again' hyperbole is mildy comic in a Apocalyptic jaded kind of way.
But still, Hendry's hyper-deflation cometh.
And Gold running up $40 is announcing a muppet trap. The trend is your friend...
Right on schedule.
I love it when a plan comes together.
BTW TODAY AND TOMORROW EXPECT SP500 TO DROP DOWN 1,300 ONCE AGAIN BUT THIS TIME FOR REAL HEADING DOWNWARDS AND OUT OF CONTROL IN ANTICIPATION FOR FED QE3 IN JUNE....EXPECT BANKING SECTOR TO SLUMP 5-10% FURTHER....GOOD LUCK GUYS
Another Obummer ad, another click. Google to Obummer....pay me bitch!
He he he
10-yr. yield at 1.59%.
Wow, that's "Animal Spirits" at its highest!!
Yep big government people gotta love that free money. It's too bad it's on the backs of the poor and the middle class. But hey, that's another story entirely.
What society hasn't built itself off the backs of the poor and middle class? Just history repeating itself...
There is no way the developed countries GDP can grow as the large corporates have outsourced the high paying manufacturing and services jobs in their countries to the developing countries leaving their own local customers short of cash to buy the products they sell.
http://www.marketoracle.co.uk/Article24581.html
It really is this simple.
And you don't even need to be a Princeton economist to figure that one out
World Class Worry Warts, here's the bottom line: AK 47 + Pb 82 == Ag 47 Monedas 1929 Comedy Jihad New Math Post Crash
Yes, but GDP FELL to 1.9%, jobless claims rise 10,000 AFTER REVISIION!!! And consumption down. Oogh!
http://confoundedinterest.wordpress.com/2012/05/31/jobless-claims-rise-gdp-falls-to-1-9-consumption-less-than-expected/
The U.S. is looking like France more and more each day, But without the great food!
French food is vague ! The most noteworthy cuisines are Chinese, Mexican, Italian and German/English/American Hybrid Cookery ! Monedas 1929 Comedy Jihad French Country Cooking Is Good
What do you mean without the great food? We have Big Macs and double whoppers with cheese a jumbo fries and a jumbo ( except for New York) drink. It doesn't get any better than that.
American food is tasty, convenient, fast, consistent, repeatable, economical, ubiquitous, popular, clean, attractive, served hot in people friendly locales and well marketed and profitable ! Monedas 1929 Where's my Gosplan Drive-In Burger 'n Borscht Stand ? Where's my North Korean Dog 'n Rice Bowl ?
Snap Quiz: 1. Name me five "big government" Libertarians ! 2. Name me five "small government" Fascists, Socialists or Communists ! End of Quiz ! Monedas 1929 Comedy Jihad Re-Writing Re-Writen Leftist History
The claims rose mainly due to 17,000 brokers that were fired after they bought in on the Fakebook IPO...
GDP growth rate below inflation rate = no growth
No, you don't understand.
The GDP growth rate is quoted using the GDP Price Deflator. It is already real. Inflation is built into the quote.
Except that the deflator is a fake made up number that has no bearing to real world inflation and a lower number by several multiples.
You forgot to mention that part.
Yeah, but woudn't BLS math put the change at 13K? Or not... I must not have the logic down on how to handle prior week upward revisions when claims are higher than expectations. Maybe it's maximize the good lies and minimize the bad ones?
Picking a President on the basis of skin color is as smart as picking a wife on the basis of breast size.
Doesn't compute.....Flag as non sequitur ! (1) Monedas 1929 Comedy Jihad Triple-D Baseball Cap Cranium
Will the FED give your money to the banks. Won't the FED give your money to the banks. I was jogging around the track yesterday imagining what the track might look like in a hundred years. A cool breeze blew by.
BTD
There are lies and damned lies. Which are these?
I believe the Pants on Fire variety.
The post Facebook average Joe retail investor is still pulling money out of the market......unfortunatly they are going to treasuries I think....that will end bad too...
lets see:
GDP growth - 300billion
deficit - 1.5 trillion
A clear path to prosperity.
We can't continue to pay the out of workforce population (fake disabled, welfare, unemployed) to just be consumers. This part of the population must produce something of value for the country in order to have prosperity.
The GDP revision figure headline needs a little pizzazz. How about "GDP plunges 14% from initrial estimate, ticks below 2%, factoring inflation, economy flatlining." Beep .... Beep .... Beep .... Beep .... beeeeeeeeeeeeeeeeeeeeeeeee
COSTELLO: I want to talk about the unemployment rate in America.
ABBOTT: Good subject. Terrible times. It's about 9%.
COSTELLO: That many people are out of work?
ABBOTT: No, that's 16%.
COSTELLO: You just said 9%.
ABBOTT: 9% Unemployed.
COSTELLO: Right 9% out of work.
ABBOTT: No, that's 16%.
COSTELLO: Okay, so it's 16% unemployed.
ABBOTT: No, that's 9%...
COSTELLO: WAIT A MINUTE. Is it 9% or 16%?
ABBOTT: 9% are unemployed. 16% are out of work.
COSTELLO: If you are out of work you are unemployed.
ABBOTT: No, you can't count the "Out of Work" as the unemployed. You have to
look for work to be unemployed.
COSTELLO: But ... they are out of work!
ABBOTT: No, you miss my point.
COSTELLO: What point?
ABBOTT: Someone who doesn't look for work, can't be counted with those who
look for work. It wouldn't be fair.
COSTELLO: To who?
ABBOTT: The unemployed.
COSTELLO: But they are ALL out of work.
ABBOTT: No, the unemployed are actively looking for work... Those who are
out of work stopped looking. They gave up. And, if you give up, you are no
longer in the ranks of the unemployed.
COSTELLO: So if you're off the unemployment roles, that would count as less
unemployment?
ABBOTT: Unemployment would go down. Absolutely!
COSTELLO: The unemployment just goes down because you don't look for work?
ABBOTT: Absolutely it goes down. That's how you get to 9%. Otherwise it
would be 16%. You don't want to read about 16% unemployment do ya?
COSTELLO: That would be frightening.
ABBOTT: Absolutely.
COSTELLO: Wait, I got a question for you. That means they're two ways to
bring down the unemployment number?
ABBOTT: Two ways is correct.
COSTELLO: Unemployment can go down if someone gets a job?
ABBOTT: Correct.
COSTELLO: And unemployment can also go down if you stop looking for a job?
ABBOTT: Bingo.
COSTELLO: So there are two ways to bring unemployment down, and the easier
of the two is to just stop looking for work.
ABBOTT: Now you're thinking like an economist.
COSTELLO: I don't even know what the hell I just said!
(insert your own numbers - it doesn't matter anyway)