Plow Horse Enters Quicksand - America's Abysmal June Economic Report Card: 7 Positive Surprises; 23 Negative

Tyler Durden's picture

There was a time when we mocked all those who said the US economy can sustain some sort of organic, Fed-free recovery on its own, and perhaps, just perhaps, regain the virtuous cycle. We now just feel sad for them. The latest confirmation why those perpetual optimists will likely never again get it correct in their lifetimes, except for the 1-2 month (and increasingly shorter) period just after a new LSAP program is introduced by the Fed, is the June US economic report card. Courtesy of Bank of America we see that 22 of the 30 most important economic indicators in June missed expectations. And since this includes the seasonally adjusted July 7 claims beat, which was discovered to have been merely a seasonal auto-channel stuffing gimmick, the real number of misses is 23 out of 30, or a whopping 76% fail rate.

The BofA post mortem on the above data:

Data releases continue to come in below an already beaten-down consensus. As we have noted before, June data should be relatively immune to the weather distortions that boosted the data in the winter and weakened the data in the spring. Yet, as Table 1 shows, 22 out of 30 indicators covering the month of June have surprised to the downside. Moreover, the weakness is not concentrated in second-tier data: the big three of payrolls, retail sales and the ISM have all been weak.


Why are the recent data so weak? In our view, it is mainly a matter of confidence. The last several years have featured a number of false dawns. Each time the US economy looks better for a while, economists boost their numbers and start taking about “take off speed,” only to see growth falter. Similarly in Europe, each time a new rescue plan is announced there is a period of optimism in the markets, only to see the crisis pop up again. This long string of false dawns is slowly eroding away confidence in the recovery.


Looking ahead, we see mainly downside risks to our well-below consensus forecast. If our Q2 GDP tracking model is correct, growth in the first half of this year—including weather-boosted Q1 and weather-payback Q2—averaged just 1.5%. The weak finish to Q2 means a negative “base effect” for Q3—specifically, data surprises in the last several weeks lowers the tracking for Q3 GDP growth by about 0.3 pp. The consensus has been drifting lower, but it still expects growth to pick up to 2.2% in Q3 and Q4.


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ihedgemyhedges's picture

McDonald's misses earnings by 6 cents, says 7 cents due to unfavorable FX.  As I posted on BKs comments yesterday with regards to FX, you ain't seen nothing yet on large cap with heavy foreign exposure.................dollar strength setting up market for a REALLY bad October...............

goldfish1's picture

"organic" ?

Speaking of organic, all eyes on California. Headlines LATimes.

"Battle over genetically engineered food heading to voters"

California could become the first state to require labels on genetically modified, or GMO, food products. Firms on both sides are gearing up for campaigns.

Monsanto's pissed. With USDA Vilsack in their pocket, we'll see how far this goes.


new game's picture

fuck kraft, gen mills, buy coop, drop health care, live life slim and trim, pay as you go and take savings and buy pm.

vote with feet and dollars - quite simple - thenshut the fuck up.

fuck californated

fuck propositon liberal failure...

goldfish1's picture

try to vote with feet and dollars when there ain't nothing left you want to buy and you gotta eat.

Organic companies swallowed up by Big Ag


Sparkey's picture

I'm no radical, but, if the insects wont eat it why should I?

1Inthebeginning's picture

This is huge.  To require labels that specify "genetically modified organism" would give consumers the knowledge to make a informed choices.  Previously big AG was able to block the labeling stating that the label was misleading because their wasn't a meaningful difference.

Genetically modified food is to be avoided.  And food that has been genetically altered so that it can survive being bathed in insecticides and herbicides is to be completely avoided.

Please Californians show the courage and get the GMO's labeled.


My organic heirloom tomatoes are doing great growing in my hugelkulture.

Yshua bless

BudFox2012's picture

Wonder what percentage of McDonalds sales comes from the dollar menu?  Hard to make a profit off .99 burgers with overhead what it is these days...

caimen garou's picture

my money is on charmin,because of the people that eat mc dump!

WhyDoesItHurtWhen iPee's picture

Long Fiat Farts and Anal Ponzi Leakage.

GetZeeGold's picture



Crap......MickeyD misses? Now it's serious.


TrainWreck1's picture

The EBT crowd has moved on up to Red Lobster.

Seriously, I have noticed that McD's parking lots are increasingly empty.

It's more than just awful 'food'


gbresnahan's picture

Jobless Claims (6/2) says Neg but it should be Pos

fonzannoon's picture

Anyone see Howard Dean on this morning doing his Angry face talking? "The Economy is fine! (really angry face) IT'S FINE! (nose extension).

Chuck Walla's picture

Anyone see Howard Dean on this morning doing his Angry face talking? "The Economy is fine! (really angry face) IT'S FINE! (nose extension).


Please!  Always describe that idiot socialist by his full name: THE INSUFFICIENTLY MEDICATED Howard Dean.

DanDaley's picture

More of the dark side of SSRIs.

BRAVO 7's picture

i interrupt your regular programming to bring you this vital message;

F.M. Riley (27 June 2012)
"Connecting the Dots"   Dot No. 2…….Some of our readers are familiar with the account of Rabbi Yitzhak Kaduri, the old Jewish Rabbi who passed from this life in 2006 at the age of 113.   This was the Jewish year of 5766.  Before his passing he claimed that in a dream the Messiah of Israel had come to him and revealed Himself to him.   He told the other Rabbis in Jerusalem and other parts of the world that he knew the Messiah personally for he had met Him in his dream, spoken with Him, and worshiped Him.  

     Rabbi Kaduri then said that he had left a letter to be opened after his death.  This letter would reveal the name of the Messiah and other important information which the Messiah had given to him.  The letter was left in the possession of his son, and if I remember correctly there was a designated time after his death when the letter was to be opened.  Anyway…..

     The letter was opened at the designated time and it was such a shock to the Rabbi’s son that he hesitated to reveal the contents of the letter, but finally did.  In the letter the old Rabbi stated


that the name of the Messiah of Israel was “Yeshua,” the One whom the Christians call “Jesus.”   That revelation was such a shock to the Rabbis in Jerusalem and other parts of the world that it  created an uproar among the Rabbis.   Remember that for 2,000 years the Rabbis of the Jewish people have lied about  the resurrection of the Lord Jesus Christ [Matthew 28:11-15], refused to believe on Him, and have done everything they knew to do to discredit Him in the eyes of their own Jewish people.   Remember also that the Lord God explicitly told the Jewish people centuries ago,   “As for My people, children are their oppressors, and women rule over them.  O My people, they which lead thee cause thee to err, and destroy the way of thy paths,” Isaiah 3:12. 

(this letter the old rabbi left for the world goes on to reveal the month and year that the lord jesus told him he would return. this same jesus,acts ch.2)

all you need to know,the simplicity of this salvation gospel,

mark ch.16:16

he that believeth and is baptized shall be saved. he that believeth not shall be damned. in red letters in the 1611 kjv. ) my commentary   the rest at this site.

spanish inquisition's picture

Nothing like gaming prophecy to herd the sheeple for fleecing. Besides, I already gave all my money to Harold Camping.

Temporalist's picture

Me too, and not even a lousy t-shirt.

Sean7k's picture

You're not to bright, are you? 

Revealed dreams, letters held for effect, the BIG SECRET?

Con game 101. Please take your gospel of crappola and stick it where the Son don't shine. 

rufusbird's picture


" He told the other Rabbis in Jerusalem and other parts of the world that he knew the Messiah personally for he had met Him in his dream, spoken with Him, and worshiped Him."

If I spent my life memorizing the Bible, I would probably start having dreams and imagining I am talking to the Messiah myself. Look at what happens to the people who do the same thing with the Koran. You have to be moderate in what you allow your self to imerse your mind in. Otherwise you develop a distorted vision.


The Watchman's picture

Just shoot the horse and put it out of it's misery.

insanelysane's picture

Even horses don't need to face moral hazards.

insanelysane's picture

Circuit breakers on stand-by?  Check.

gatorengineer's picture

Nah.....  The PPT, Plunge Protection Team just will have to give up Monday morning porn.....


Instead they will make some chart porn...

txsilverbug's picture

Now all they need to do is report the real numbers and not these government sponsored lies.  Unemployment at 8.2%? Riiiight...

The worst trader's picture

I believe that unemployment is more like 22%

Jim in MN's picture



Awesome, CSPAN Monday morning call-in topic: Should US Banks Be Nationalized?

Plus, their very nicest hostess Libby Casey handling the calls.  Way to start a cloudy half-staff Monday.


ihedgemyhedges's picture

Damn........................she would definitely do in a pinch.  And after 18 years of marriage, every night is a pinch.......

+1 to you for finding the hot librarian look.......

LMAOLORI's picture


I don't know why that's awesome if they nationalize the banks they SOCIALIZE the banks debts!  Think Ireland they were actually doing pretty well until they nationalized the banks or think about the Credit Default Swaps.


Behind Credit Default Swaps Market, a Cartel Left Open to Collusion



gatorengineer's picture

One of the most bullish for stocks articles ever published on Zero Hedge..... Cue Benny and the Jets.......

txsilverbug's picture

Thanks for putting that crap song in my head at 730 on a monday... thanks.. ?Be Be BENNY AND THE JETS.. ?

Melin's picture

'twas my intro to Rock and Roll and Axl Rose's inspiraton. 

Debtless's picture

I fear the euphemism 'Less worse than expectations' making a resurgence soon in respect to worsening economic indicators.


Meesohaawnee's picture

hit me for watchin bubblevision. i like the headline "recovery  in trouble".. it would have had to be happening in the first place for it to be in trouble they really are financal comedy central.  With that being said. I luv the smell of rule 48 mornings. they smell like....    could it be one?

q99x2's picture

We've re-coupled. Fuck Globalism.

The Squid's picture

Atreyu and Artax, in the Swamp of Sadness...

Meesohaawnee's picture

does robo come out and play on days like these?

scatterbrains's picture

It feels like that odd low pressure, staticy peace just before a shit storm rolls in right about now.  As dollar derived loans start getting called in and promises on paper begin to burn. Like a giant hoover vacuum over the earth, all assets paper and physical will get flushed to meet those calls...unless or until berstinky pulgs the printing press back in. I wonder if he's just trying to crush gold in a "smash and grab" kinda way? and how far can he push it down?  hmm

samsara's picture

'They Shoot Short Sellers Don't They?'

falak pema's picture

where's that brave australian lady? When we need her.

giovanni_f's picture

40 years living off the avails of others, especially of Germany, Japan, China. This game is now over. 

HurricaneSeason's picture

Weather boosted Q1 was brought down to 1.5% H1 by the poor Q2 and provides a lower base for Q3. Add that up and Q3 is Expected to be 2.2%.  2.2<x<1.5 With the debt ceiling and fiscal cliff approaching.

pasttense's picture

Everyone here knows that economic "experts" don't know what they are doing. So it's not important whether their estimates are correct or not; what is important if the actual level of the numbers are negative or positive for the economy. So you start with the first: actual number 377,000 jobless claims--that is negative...and continue.

aheady's picture

Wrong. Everyone here knows they know EXACTLY what they're doing.

czarangelus's picture

Bwahaha love the picture. The Neverending Story? My childhood represent!