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Houston, We Have Recoupling - Initial Claims Back Over 400,000 (Post Next Week's Revision), Retail Sales Ex Autos Worst Since Early 2010

Tyler Durden's picture




 

Remember that whole "US is decoupling" theme so pathologically spread around by two-bit propaganda media outfits staffed by journalism B.A. majors? Time to put it in the trash where it belongs. As long expected, the temp hire surge, so effectively used by retailers to dump inventory below cost (just ask Sears), is over, and in the first week of 2012, Seasonally Adjusted claims soared to 399,000, the highest since November and a number which next week will be revised over 400,000, a decimation of expectations of 375,000 (naturally last week's number was revised upward from 372K to 375K - a long-lasting BLS tradition of fudging data that everyone knows about now). The Non-Seasonally adjusted number was +102,314 claims in the first week of the year. And the real question is how many of these real departures were of the banker type, where the impact on lost withholding taxes going forward, and thus government revenues, will be quite dire. Continuing claims also missed expectations, rising to 3628K from a revised 3609K (expectation was for an unchanged print, pre-revision, of 3595K). And the worst news is that the 99-week cliff continues to grab more and more, with 48k people dropping off all rolls, and thus from the labor force completely, meaning the labor force participation rate in January will likely drop to another fresh 30 year low. But the horrendous jobs update was only one part. The other one focuses on actual consumer spending, as confirmed by the major miss in retail sales which were up 0.1% on expectations of 0.3%, but the entire gain was due to car purchases primarily driven by cheap govt-funded subprime credit for GM vehicles. Sales ex-autos actually declined by 0.2%, on an expectation of 0.3% rise: this was the first decline and worst print since early 2010. So much for the consumer-led recovery. And so much for the unemployment pick up. And so much for the decoupling. The chart below shows what will happen as the world finally reconverges, as was posted yesterday.

Some more thoughts on retail sales via Bloomberg and CRT:

  • Control sales drop “a very bad sign for the condition of the consumer, bodes ill for personal spending” in 1Q, says Bloomberg economist Joseph Brusuelas
  • Underlying detail “suggests a very difficult holiday sales season,” points to “difficult earnings season for retailers": Brusuelas
  • Supply/production estimates on commodities ‘‘much stronger than expected,’’ means ‘‘several commodities could weaken further,’’ says Bloomberg economist Rich Yamarone
  • "Big surprise” in 0.4% decline for non-store retailers, proxy for Internet sales: Brusuelas
  • Weaker-than-forecast retail sales data suggest are “more in line with the post Black Friday anecdotes,” David Ader, strategist at CRT Capital, writes in note.
  • "Weakness in the core core area is disturbing; while seasonals play into it, it looks odd to see electronics and non-store retailers (i.e. On line) come in with negatives": Ader

Retail sales ex autos:

SA Initial Claims:

Charts Bloomberg

 

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Thu, 01/12/2012 - 10:38 | 2058129 Odin
Odin's picture

Can someone explain to me why the market is not tanking today? I mean seriously, what sort of fucked up fantasy bull world is this?

Thu, 01/12/2012 - 10:44 | 2058161 Randall Cabot
Randall Cabot's picture

$ down.

Thu, 01/12/2012 - 11:01 | 2058219 bnbdnb
bnbdnb's picture

Squeeze the shorts. This is why I stopped playing.

Thu, 01/12/2012 - 10:38 | 2058131 g speed
g speed's picture

IMHO the fed cannot QE-- political climate, cash held in corp coffers and bank balance sheets, lower market (stock markets) participation, de-valued dollar chases de-valued (non saleables) manufactured goods and real-estate causing loss of wealth, increased  price in dollars of PMs and oil, un-controlled increase in interest on debt in shadow banking, accumulation of sovergn debt to unsustanable levels, are some of the reasons.

Thu, 01/12/2012 - 11:02 | 2058224 kridkrid
kridkrid's picture

ah.... but they have no choice.  It may not be called QE... I suspect it will be called WWIII... but easing we will get.

Thu, 01/12/2012 - 10:40 | 2058138 vegas
vegas's picture

Double Face Palm - Whoops! This can't be good news for B. Hussein Soetero. Ok, time to go to plan B - just make shit up. Ohh wait a minute, we're already doin' that.

 

htpp://vegasxau.blogspot.com

Thu, 01/12/2012 - 10:41 | 2058147 gettingready8
gettingready8's picture

What a mess. Pisani on CNBC is cheerleading the hell out of Draghi etc.

 

 

Thu, 01/12/2012 - 10:41 | 2058148 props2009
props2009's picture

http://fnn24.com/?p=36768

ECB Draghi says am proud of ECB ethics

Thu, 01/12/2012 - 10:44 | 2058158 Caviar Emptor
Caviar Emptor's picture

And just like that we're starting a wave of corporate bankruptcies. It was delayed by the Fed and fiscal stim of 09-11. But all at once they're falling like apples, just a few at first: AMR, Kodak, Dynegy, Borders, Hostess. Sears is on the launch pad. Get ready for more. I'll go out on a limb and predict 2012 will be an eye opener: BK and hostile takeovers

Thu, 01/12/2012 - 10:48 | 2058175 Jlmadyson
Jlmadyson's picture

Oh they are going to start flowing like water soon. They have propped this machine for so long but 2012 is going to come home hard. 08 ain't got nothing on this.

And then how are they going to spin all those layoffs?

They got nothing left. Nothing.

Thu, 01/12/2012 - 10:49 | 2058186 SheepDog-One
SheepDog-One's picture

I believe youre right, and thats why they have a huge Iran mid east war all nice and staged and ready to go.

Thu, 01/12/2012 - 10:53 | 2058200 Caviar Emptor
Caviar Emptor's picture

Yup. It's the next leg in the downsizing of America as I call it, but they ahve more polite words for it. The shocker in today's report was the 3.9% plunge in electronics and appliance sales. That was supposed to be the dynamic core of this amazing/sarc economy. Even the FIRE sector is going to consolidate this time

Thu, 01/12/2012 - 11:11 | 2058258 kridkrid
kridkrid's picture

Exactly right.  And that huge mid east war has all of the trappings to extend far beyond just the middle east.  China will want in... they need to get rid of an excess of young men who have no prospects of finding a wife (or a job as the global economy ceases to exist).  Russia wants in because... not sure why.  There are resources to carve up in Africa... oil in South America... we live in a global economy, why should the wars be regional.

Thu, 01/12/2012 - 13:25 | 2058781 earnyermoney
earnyermoney's picture

Speaking of Kodak, was that not one of Leo's favorite stocks outside the solar sector?

Thu, 01/12/2012 - 10:54 | 2058204 Jim in MN
Jim in MN's picture

The problem is gold and oil.  These are limiting efforts to apply lipstick to the comatose pig that is the US consumer economy.  All the lipstick available has negative implications for the US dollar, but with gold and oil (OK oil) straining at the leash, it seems the systemic limit to Fed shenanigans is showing up now, right when it is least welcome--the beginning of a Leap Year, er presidential election year.

I bet there is a hot debate 'somewhere in a major capital' about blowing up Iran early in the hopes of getting the oil market put back together before the summer driving season, and completely forgotten by Labor Day (when Americans stereotypically start noticing the election weeks away). 

Fat chance.  Gonna be a hot Year of the Dragon!

Fri, 01/13/2012 - 17:12 | 2063143 DaveyJones
DaveyJones's picture

that's the funny thing about gold and oil, there's only so much but the takers keep growing.

Thu, 01/12/2012 - 10:54 | 2058205 youngman
youngman's picture

Yes Pisani is a government spokesman now....the bond sale went perfect...the fear is gone...but wait..who and how was it bought..oh thats right..they QE´d it.....and will again...and again...to me its a sign that if the central banks are going to be buying all the bonds..why would an individual tax paying investor want to own them...I would sell all I had if I was an investor or a country that holds them...let teh ECB and the Fed buy them all....got gold

Thu, 01/12/2012 - 11:04 | 2058232 Caviar Emptor
Caviar Emptor's picture

Yeah I luv when Pisani or one of the talking tits becomes a propaganda minister.

Thu, 01/12/2012 - 12:20 | 2058557 ucsbcanuck
ucsbcanuck's picture

"talking tits" LOL!

Thu, 01/12/2012 - 11:02 | 2058222 adr
adr's picture

Let us also not forget that gasoline was at a record high for december, also included in the numbers. As per what real people in the business told me and my own observation selling into retail, THIS CHRISTMAS WAS HORRIBLE. Consumers only bought product when it was 50% off or more. Just like shopping at JC Penny, never pay full price for a shirt because two months later you can buyit for 75% off. When a retailer has 80% margin why would you ever let them make 80% off you. Let them hve a nice healthy 15% if you want to make them happy. That's still more than any vendor to them makes. Selling into mass retail you are lucky to make 2% profit once you clear all your expenses. If you buy something 75% off you are just paying what the item should cost.

Thu, 01/12/2012 - 12:11 | 2058521 MachoMan
MachoMan's picture

Exactly.  Who pays retail for anything in the age of information?

Thu, 01/12/2012 - 11:21 | 2058299 Alex Kintner
Alex Kintner's picture

Bullish. Unemployment rate will drop again as more 99ers fell off the UI rolls. Also bullish for real estate under bridges since that is where they will go to live.

Thu, 01/12/2012 - 13:15 | 2058754 kwality
kwality's picture

I don't get the logic to the argument that the UR will drop.  99ers don't fall into a crack in the universe and go to the time of the Roman soldiers when they go off the rolls... unless they are independently wealthy, they are gonna be looking for jobs, and thus considered part of the workforce and part of the unemployment rates (U3, U6, etc), which are determined by the BLS monthly phone polling system as opposed to who is receiving UI or not.

Thu, 01/12/2012 - 11:35 | 2058365 JiminGA
JiminGA's picture

Re: retail sales.  Remember all those glorious reports of exploding holiday sales put out by by retail industry organizations (ICSC, NRF, etc.)?  They were accurate, to a point.  They reflected comp store sales which ignore lost sales from closed stores and include sales gains from some transfer of sales from those closed stores.  Now that we see total against total the truth is revealed....retail is in the dumper and the consumer is not pulling us out of the slump.  Back to reality.

Thu, 01/12/2012 - 11:40 | 2058370 Zombies On Toast
Zombies On Toast's picture

Didn't we just read about an increase in consumer credit? Yet, nobody bought anything for Christmas! So, did people use that credit to buy gasoline and groceries? 

Thu, 01/12/2012 - 11:59 | 2058457 Alex Kintner
Alex Kintner's picture

A friend at IBM tells me they are starting their annual job offshoring program this past week. IBM usually offshores 10-15K US jobs every year by stealth. They even stopped reporting US and Worldwide workforce totals in the annual report since it revealed the massive offshoring. One could deduce offshoring rates with these numbers -- bad for PR. I'd guess this is typical for US companies now.

Thu, 01/12/2012 - 12:11 | 2058514 Jlmadyson
Jlmadyson's picture

Oh man great point on those "record holiday sales". Probably could pull a 1000+ articles on that right.I mean really give us a break already with the BS.

Thu, 01/12/2012 - 12:16 | 2058538 overmedicatedun...
overmedicatedundersexed's picture

great to see Obuma wanting even more illegals here..because of the robust jobs market no doubt-us business can't find workers you know.

"workers" as in exempt from health care and benefits under the table types.

GE still off shoring all hail the multi nationals

remember FREE TRADE is a tool of the elites even if some market types think otherwise.  follow the free trade since 1980 and look at jobs lost in the west..it is not rocket science it has been a disaster for western workers mostly USA workers. living standardsin USAas well track the growth of free trade.

Thu, 01/12/2012 - 13:32 | 2058800 karzai_luver
karzai_luver's picture

If one saw or expected a credit boom crackup what would one do if one looked at the world outside that "market"?

 

hmmmmmmmmmmmmm...............

 

Thu, 01/12/2012 - 12:29 | 2058602 apu123
apu123's picture

A quote from CNBC this morning as Liesman was denigrating Rick Santelli.  Santelli said "Liesman, I will debate these retail sales and unemployment numbers anytime, you bring your 1000 economists and I will bring my two dollar calculator and an internet connection." 

Man I have developed an extreme dislike for Liesman, the crux of his argument was that a thousand economists agree with him regarding the economy and its booming recovery, therefore the numbers are wrong.  Liesman doesn't even check the numbers himself.

Thu, 01/12/2012 - 12:40 | 2058642 Nobody For President
Nobody For President's picture

I think PODS nailed it: MDB is one of the Tylers upping the post quotient - *every single time* MDB posts there is this incredible, and now nauseatingly predictable outpouring of 'what a dummy', 'Naw, he's just shitting you' series of posts good for a couple of pages of posts.

If nothing else, MDB is king of the ZH tweakers - consistently good at it even when being internally inconsistent, as today. 

But even cleverness gets old.

Thu, 01/12/2012 - 12:46 | 2058659 Jlmadyson
Jlmadyson's picture

Liesman is the worst no question about it. Always has been.

+1 for Santelli.

Thu, 01/12/2012 - 12:56 | 2058690 apu123
apu123's picture

I am surprised that the LTRO backed bond purchases have kept the market from totally tanking on these job and retail sales numbers.  Must have been that sweet headline touting the "Huge Spike" in mortgage apps.  We all know that approval for those is in the bag.  What a joke. 

 

Thu, 01/12/2012 - 12:59 | 2058703 yogibear
yogibear's picture

Time to rally on!! More bad news the higher they take it. 

Thu, 01/12/2012 - 13:10 | 2058741 Shizzmoney
Shizzmoney's picture

But Home Depot is hiring 70,000 (temp) workers!  Things are OK!

A lot of companies are doing this as well: hiring temp-to-full time to penny pinch, espe4cially when it comes to Health Insurance, where here in MA "Romney-Care", an employer can wait 6 months (!) until offering Health Care,

http://money.cnn.com/2012/01/12/news/companies/home_depot_hiring/index.htm?source=cnn_bin

Thu, 01/12/2012 - 13:12 | 2058746 quacker
quacker's picture

Stock market shrugging this off, hardly a blip.

Recoupling is bullish. Collapse is bullish. Bearishness is bullish.

Thu, 01/12/2012 - 13:31 | 2058798 apu123
apu123's picture

It is so bullish I bet we finish green today on the strength of the US economy!  I wonder when the bottom will fall out? 

Thu, 01/12/2012 - 14:54 | 2059131 kevinearick
kevinearick's picture

So, I ask my ignorant nephew why he keeps asking me when I tell him no every single time and his response, because everyone else gives in, sooner or later, is the market assumption – irrational markets outlast rational investors. Knowledge is presumptuous by nature.

The good old boy and girl networks in Mass and DC remain unconvinced that no means no. Let’s warm up the motor…

The Traveling Salesman Problem, Part Infinity

Krugman/NY Times: “First, families have to pay back their debt [ask Trump]. Governments don’t – all they need to do is ensure that debt grows more slowly than the tax base [of, by, and for the people]… Second – and this is the part almost no one seems to get – an over-borrowed family owes money to someone else [future generations]: US debt is, to a large extent money we owe ourselves [exactly who is we].”

Under the empire demographic ponzi assumption of agency proprietary participation, money is free (speech), the only difference between limousine liberals and social conservatives is the temporary destination of embezzlement, and that the family (new) serves at the pleasure of government (legacy). Really, really bad assumption.

What happens when the real tax base (income) can no longer be measured and must be replaced by monetary expansion (RE price inflation) into make-work for robots (govt. employment) to produce balance sheet leverage? Are Apple sales organic growth or system cannibalization? Is there such a thing as a private corporation within the Constitution or under common law? Why can’t China buy male progeny to balance its population?

Authority/talk always comes from behind. Of all the Admirals’ sons, the Senator should know that best. If the empire cannot convince you that you are helpless, it must compete for your cooperation. The empire prison is built with a printing press and its blood pressure may be measured by the price of energy.

Energy on the margin is free; it existed long before the empire. The transmission start-up cost is empire modification. Don’t worry about Iran /core detonation / empire MAD. Economics is like Judo; the planet has an automatic recycling mechanism. Employ ignorance against itself.

Free money demands viral population growth, disconnecting the empire from the planet at the tangent. Always schedule completion of the root and communication vehicle by the time population growth decelerates.

Law evolves to root out non-conformers, creating fat tails. One it sees; the other it does not. You do not have to break a single law to think, which is why empires employ Family Law embedded in common law to create a catch-all.

The empire pays consumers to liquidate investors, for empire growth. There is no such thing as organic empire growth. As we observe increasingly nonperforming assets hang declining participation, driving the market…

Municipal bankruptcy recasts debt, leaving the banks to blow up. As a security asset/threat, intelligent non-conformers providing the organic growth, with no interest in cheap empire crap, are taxed at 100%, so the firefighters can grow pot, the police state can protect them, the banks won’t go broke, and their feminist wives can run non-profits, to which the non-conformer is assigned as a dishwasher in the churn pool, leaving the children to empire discretion. Invest accordingly.

70% of kids are directly dependent upon government. Most of the rest are indirectly dependent. Printing money to tax it through agency delay, paying off the elder majority, as the basis to print more money is not an intelligent process; it’s gravity. Empires are like cheap magicians with ever more expensive diversions, encouraging the coordinated applause of black holes seeking each other’s company.

Once unelected agency rolls out non-personhood through Family Law, there is nothing left to balance the positive feedback, and it implodes. The planet sees the fat tail, because it is fully engaged.

The university is a fraud. Why wouldn’t you expect a student loan crisis? The issue is timing of recognition.

Thu, 01/12/2012 - 15:04 | 2059186 toomanyfakecons...
toomanyfakeconservatives's picture

From chattel slaves to wage slaves in a historical microsecond...

Thu, 02/23/2012 - 07:19 | 2188460 mediaprizm
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