Schrodinger Economy Chugs Along As Empire Manufacturing Misses; Retail Sales Beat

Tyler Durden's picture

When in doubt: baffle them with an economy that is both alive and dead (as has been the case for the past 4 months). While on one hand we saw a big miss in the Empire State Manufacturing Index, which slid from 20.21 to 6.56, on expectations of a +18.00 print, and the lowest since November, March retail sales in turn beat expectations, coming in at +0.8% on both headline and ex-autos, with the expectation for retail sales ex-autos at 0.6%, slightly less than the +1.1% retail sale change reported for February. Why are retail sales still strong? Goldman explained it earlier: "We expect that warm winter weather boosted retail sales over the last several months, but it is probably too soon to expect a negative payback in today's report, given that temperatures were still higher than normal in March (and to a greater degree than in February)." Translation: consumers use credit cards to buy things in March they would otherwise have bought in May.

As for the Empire Fed, drilling down:

  • New orders 6.48 in April after 6.84 in March
  • Shipments 6.41 after 18.21
  • Inventories 1.2 after 0
  • Number of employees 19.28 after 13.58; avg. workweek 6.02 after 18.52

From the report:

The Empire State Manufacturing Survey’s headline index fell significantly in April, though it still indicated a modest increase in activity. The general business conditions index dropped fourteen points to 6.6, suggesting that while growth continued, the pace slowed over the month. The new orders index was little changed at 6.5, indicating a modest increase in orders, and the shipments index fell twelve points to 6.4, indicating a slower pace of growth for shipments. The unfilled orders index fell six points to -7.2, and the delivery time index dropped three points to 4.8. The inventories index was little changed at 1.2, suggesting that inventory levels held steady.


Prices Continue to Climb


Input price increases remained significant. After rising sharply last month, the prices paid index fell five points to 45.8. Though somewhat lower than in March, this reading was well above the index’s level in the preceding several months. Selling prices also rose noticeably, with the prices received index climbing six points to 19.3. Employment indexes were positive, but moved in opposite directions. Pointing to a healthy increase in employment levels, the index for number of employees rose six points to 19.3, its  highest level in nearly a year. The average workweek index fell thirteen points to 6.0, indicating a modest increase in hours worked.

And Retail sales losing momentum - even as they beat and remain positive...


And now back to Europe.

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transaccountin's picture

Spend muppets spend. Buy that china junk!

Consumers shrug off high gas prices. Shrug eh.

I think I need to buy a gun's picture

actually the stadsiums are full, malls are full and alot of traffic, i think things are looking very good

junkyardjack's picture

I read an article this weekend in either Time or Businessweek about competitive biding for houses that are actually pushing prices up in some areas.  Might be near the bottom.

Vampyroteuthis infernalis's picture

Wait until all of those soon-to-be foreclosed houses hit the market. The fraudclosure mess prevented the banks from getting rid of 100,000's of house with delinquent owners. Prices will continue on down.

BTW, don't believe what the MSM economists say. It is just BS.

LawsofPhysics's picture

LOL!  Wage and tax reciepts tell a different tale.  Sure, I know lots of people still getting into rental units.  Going to be a bitch when state governments increase taxes (which they will have to to simply cover services soon) and the tenants don't have higher wages to cover the rent increases you will have to make.


this is classic and has happened over and over.  Government increases taxes and then tries to dictate what you can charge (price controls).  Good fucking luck.  If you do have rental units (and I do), get the rent increases now.

mayhem_korner's picture

Spend muppets spend. Buy that china junk!


In my head, those words are coming out to the Blues Image tune Ride Captain Ride.

Id fight Gandhi's picture

Timmey said nobody minds higher gas prices. They got a break in Heating costs the past winter. Flawless logic.

Vince Clortho's picture

Yeah, I saw that the "economy" is now better able to "absorb higher gas prices".

Glad Timmy was able to clarify that for the muppets who might otherwise think higher gas prices would further lighten their wallets.

We are truly blessed to have a man of such towering intellect among us.

Dick Darlington's picture

Retail sales, description from BBG: Adjusted for seasonal variation, for holiday and trading day differences, but not for price changes. Nuff said...

wang's picture

worth repeating


but not for price changes


Shizzmoney's picture

but not for price changes

That won't be good for precious corporate profit margins for quartly reports; but they're "moving inventory".

Don't worry, though; the US consumer will pay to keep those afloat too in terms of paycuts, job layoffs, weakening health care coverage, and inflation.

But hey, you can get an iPad2 for 60% off!

Jason T's picture

Income growth is rolling over and savings rate going down.... we are very soon running on empty.. oh the best part is the transfer receipts, which nearly hit 100% of total Federal revenue in 2009, are no longer growing year over year.. and there is no way for another ramp up when we go deep into recession again..



Ted Baker's picture


ziggy59's picture

Spend it forward....

Conman's picture

So do I put back on my dow 13k hat today?

SheepDog-One's picture

Yep, retail will surely show up now to buy stocks, with credit cards.

RiverRoad's picture

What's been keeping retail going are all those folks (and their brothers and sisters) who have been living rent free together in foreclosed homes.  But their days are numbered now....

mayhem_korner's picture

Translation: consumer use credit cards to buy things in March they would otherwise have bought in May.


Bingo.  With irresistable easy credit...liar's poker continues.

SheepDog-One's picture

Who are you gonna believe, your own lyin eyes? Or BS govt data?

valley chick's picture

and what does the market believe?

SheepDog-One's picture

You speak of this 'market'? Is that the same as a muppet?

valley chick's picture

it is what it is through "rose color glasses".  (and to include any B(L)S gov stats.)  ;-)

More of the same...extend and pretend.

SheepDog-One's picture

Oh, well last week it was all about 'print or die', so this week its back to 'kick the can' a bit? 

Cruel Aid's picture


LOL! good delivery

scatterbrains's picture

The market believes that since it costs Bernank nothing to print /ES and since these numbers are obviously bullshit that it must mean Benny was just looking for any reason to buy SPOO so the market is riding his coattails why not? I'd suggest getting out before the close unless you can drag stops higher in globex....that is, if your not afraid of being Corzined lol

mayhem_korner's picture



The muppets have been conditioned to see the same thing through both lenses.

AU5K's picture

This is bullish, because not much manufacturing is done in the empire state-- so less is better. 

Moving overseas where the costs are lower, instead of being done here, mean we get more iStuff at a lower iPrice.


SheepDog-One's picture

Bullish? It means Ben has no cover to print. Has to be very bearish then.

GMadScientist's picture

Humans still consuming necessary items despite inflationary pricing.

The gall! Can't they see the chairman needs to print?

SheepDog-One's picture

I dont see why this would be 'good news' it means no need to print at all and the ONLY good news now is a rumor that Bernank is leaning towards the print button.

lizzy36's picture

In March sales of building materials climbed 3%.

In Q1 sales of building materials climbed at annualized pace of 22%.

YES, everyone building crap nobody needs.

Enjoy the warm weather effect while it lasts.

Fourth Horseman of the Apocalypse's picture

No economist has a calendar?  There were five weekends in March.  That alone should boost sales.  Plus, Easter fell earlier this year putting the weekend before Easter into March.  There is a boost in apparel buying ahead of the Easter weekend.  April will be the cruelest month.  

skipjack's picture

...peeps buying chickens, seeds and garden tools for K-winter...

MFL8240's picture

The title needs to change to: "The US economy which is now the buy product of consumption of Chinese made goods, which produces nothing and prints wealth, is still chugging along".  At the very least they can show it for what it is.

SheepDog-One's picture

'Warm winter weather'...bunch of BS, its not like the winter was 75 degrees and everyone was out as if spring had sprung in December! Winter was a few degrees 'warmer' and a bit less snow than avg, but to call it WARM? Freakin stupidity!

Id fight Gandhi's picture

Theyve been saying people buying spring crap in jan. and feb. few unseasonably warm days leads to runs on patio furniture apparently.

The July rush on snow blowers and winter wear coming.

insanelysane's picture

I still have a 50lb bag of ice melt that I didn't use.  Normally that bag would have been gone before February and I would have need to buy another one.  Don't buy stock in ice melt.  I may be good till 2015.

SheepDog-One's picture

Im sure next theyll be talking about the 'cold summer' if temps are a couple degrees off record highs. 

Snow shovel sales in July will surely be off the charts.

Winston Churchill's picture

This talk of the Bernake,brougt an image to mind.

That scene in Dr Strangelove ,when the guy in the cowboy hat

rode atop the h bomb,as it fell to earth.

Nid's picture

Wealth (credit card) Effect?

Any chance that the constant blathering about the greatest Bull-Market in history", between Oct-April, had an impact on folks' willingness to spend next month's paycheck in March?

Nid's picture


dbomb12's picture

"Consumer spending is not just smartphones and Starbucks. Things like housing, healthcare, food and gasoline are part of consumer spending. Consumer spending for the majority is spending to pay basic living necessities"

Maybe just maybe the rising cost of gas,food and healthcare has something to do with it

BudFox2012's picture

Of course retail sales went up.  Gun sales are skyrocketing, as are ammo, storable food, comoflage gear, water filters, and a number of other prepping items.  What could possibly be wrong with our economy?

Nid's picture

Oh, and there's this...replacement effect?

All told, 101,939 U.S. homes received a first-time notice in March, the biggest monthly increase since October, RealtyTrac said.

At the local Community College, a relatively large one, the primary indicator that Student Loan/Aid checks have arrived is the fact that the classrooms are empty, but the courtyards are full of brand new Dre Beats and Air Jordans.

indio007's picture

This cat is dead regardless of observation.