At a townhall meeting in New Hampshire, Mitt Romney borrowed a page from Ron Paul’s playbook when asked if the Federal Reserve should face an audit. “Very plain and simple, the answer is yes. The Federal Reserve should be accountable. We should see what they’re doing.” Good.
Economic pain, that is. Charles Biderman says we are nowhere near recovery.
And why should he be wrong, given the terrible slew of bad economic news? Europe’s a mess. Spain and France in trouble plus Greece wants more bailout and England had a second quarter of negative GDP indicating a double dip recession.
Treasury yields are at all time lows. The Richmond Fed came in at -17 the worst since April of 2009. GM stock lower and Apple, a good performing one til now, is too.
Housing has never recovered and home values are still down.
On the up side, poverty’s up; food stamp use is up; and disability is up. Employment, though, remains down.
Not much good in today’s economic report – if any.
First, weekly jobless numbers were high – 386,000. As ZeroHedge says:
So much for last week’s shocking beat in Initial Claims, which as a reminder printed at 350K on expectations of 372K, driven by the July 4 holiday and, what we described were “onetime factors such as fewer auto-sector layoffs than normal likely caused the sharp decline.” This week the initial claims soared right back to 386K on expectations of a 365K print: so last week’s 22K beat was promptly reversed following this week’s number- a miss 21K above expectations. And of course, last week’s 350K was upward revised to352K. Of note is what we said last week: “the Not Seasonally Adjusted claims number rising by 70K is very much irrelevant.” Sure enough, this week the unadjusted number rose even more, by 10.8K to 453K, just 13K below last year’s number of 470K. This compares to the 32K difference from a year ago for the seasonally adjusted numbers. That this stinks to high seasonally adjusted heaven needs no observation. Finally, people for whom extended claims expired soared by 84K in one week, as those on EUC 2008 benefit is imploding with each week. Overall, a very ugly number, but not horrible enough yet to send the S&P up 100 on imminent NEW QE.
Then the Philly Fed gauge of manufacturing was a train wreck. It came in at -12.7 when they were hoping for -8.0. It’s the third month in a row that it has been down.
Then in it the number of employees went from 1.8 to a -8.4. Again, ZeroHedge explains:
Hidden under the covers of this morning’s already dismal headline print in the Philly Fed data was a considerably worse than expected employment sub-index. Historically this has correlated highly with the non-farm payroll print and suggests (albeit correlation is not causation but gathering real evidence of a slowdown is) that we are heading for a negative print in the next employment report.
To add to the woes, existing homes sales missed the most in two years. The number was down 5.4% in June.
Not looking good for the Obama loving crowd.
Glenn Beck reminded people the other day all that Barack Obama has done for us. It’s quite a list. Hat tip Hillbuzz.
1. Universal healthcare
2. Don’t ask/don’t tell gone/Defense of Marriage Act trashed/came out in favor of gay marriage.
3. Justice system has become a political tool (weighing in & commenting on the Trayvon Martin case, which obviously influenced many blacks against Zimmerman)
4. Ended the war on terror. “There is no terror, only legitimate Jihad.”
5. Appointed members of the Muslim Brotherhood to posts in Homeland Security and the Pentagon. Also erased training against muslim terrorists.
6. Labor unions are a full partner in his Presidency.
7. Sueing the state of Arizona over illegal immigration, instead of enforcing existing federal laws.
8. EPA is out of control. Man, they even have SWAT teams over there!
9. Oil moratoriums. He has shut down the largest oil refinery on the east coast. Gasoline has doubled in price since Bush left.
10. Shut down the coal industry. On record as saying he would make it unprofitable and punishing to open a mine.
11. Advanced two ultra liberal judges to the Supreme Court.
12. Demonized millionaire entrepreneurs and Wall Street.
13. Co-opted banks & auto industry. Not fully nationalized just yet.
14. Credit protection agency answers to no one but the the Fed. Outside the Constitution.
15. US Military has been reduced in size, while creating a private state department civilian army
16. Changing foreign constitutions by withholding State Department money if they don’t modify their constitution to approve abortions.
17. Co-opted the media
18. Demonizes anyone with an opinion different from his.
19. Appointed Socialists & Communists revolutionaries to high positions.
20. Gave the Presidential Medal of Freedom to Socialist-Communist Delores Huerta.
21. Oversaw the basic destruction of NATO.
22. Operations such as Libya, were European-led, not US.
23. Gotten rid of the Missile Shield at the expense of Poland.
24. Given our nuclear codes & missiles from the US & allies to Russia
25. DOJ stopped prosecution of illegal voting in Florida.
26. Has been on a non-stop “apologize for America” tour.
27. Made sure ACORN was a federal budget item.
28. Cozied up with Russians, Hugo Chavez, etal. IOW, our enemies.
29. Massive regulations in place, courtesy of Cass Sunstein
30. Supports Occupy Wall Street, a group made up largely of anarchists, Communists and revolutionaries.
31. EPA can now regulate carbon emissions
32. Michelle Obama is trying to tell us what Americans can & cannot eat
33. Oversaw massive expansion of government dependency, with Food Stamp recipients going from 26 million to 48 million under his administration.
34. Bloated stimulus plans that did little other than benefit liberal pet projects, and funnel money back to Democrat election funds.
35. Student loan system now all governmental.
So the next time someone asks you why you aren’t voting for Obama, let them have it.
I think he forgot to include insulted the British on numerous occasions and insulted the Chief Justices of the Supreme Court while they were in the audience at the State of the Union address.
Today the jobless claims went up from a revised 373,000 to 383,000. Last week it was 370K, so it’s really a rise of 13,000. It’s working it’s way back up to 400K.
The ADP payroll report, considered a harbinger for the monthly unemployment number, was supposed to be 150,000. Instead it registered an even weaker 133,000. We’ll likely see tomorrow an ugly unemployment number.
Adding to the bad news is the GDP. In April the first quarter GDP was predicted to be up 2.5%. Today the up 2.2% was revised to 1.9%. So much for expert opinions.
The recently reported big drop in consumer confidence and it confirms the mood of the country is quite sour.
You wonder if the actual numbers are even worse than what is being reported. Probably so.
ZeroHedge notes: “That the ADP would miss today’s expectations of 150K is no surprise: after all as we have been explaining for a while, the only way the Fed will have a green light to proceed with NEW QE if it so chooses at the June 19-20 meeting, is if the economic data suddenly turn horrendous. Which means tomorrow’s NFP data is make or break: in fact, as far as markets are concerned, the worse the better – should a -1,000,000 NFP print come in, stocks will soar. Which is why the ADP print, which indeed was a miss, of 133K raised eyebrows that it wasn’t bigger. Still, 3rd consecutive miss of expectations in a row, and 4th out of the last 5, it gives the BLS enough rope with which to hang itself, and potentially the president, who may have no choice but to sacrifice job creation “momentum” heading into the presidential race, in order to keep stocks higher.”
Tyler Durden of ZeroHedge breaks down today’s numbers:
There are those who thought last week’s massive Initial claims miss was the last one. They were wrong. Instead of printing at the expected 370K, an improvement from last week’s already big miss of 380K, this week came at a whopping 386K, the worst standalone print in 4 months. Well, until last week’s revision that is: instead of the 380K print that stunned everyone, last week’s number has now been revised to a massive 388K. Why? So that mainstream media can declare, with a straight face, that this week saw the number of initial claims decline! Here is the reality: last week’s expectation was for a print of 355K. Instead we got a number of 380K. Now this number is being revised to 388K, and is the biggest initial expectation to revision miss since early 2011. Needless to say, this means two things: 1) the transitory bump associated with record warm weather, which was nothing but pulling from the future, is now over, and 2) the April NFP print will be another disaster, which is just as the Fed wants it – after all it is time to start setting the stage for the NEW QE (and certainly not QE3 which is already in place as Jeff Gundlach was so kind to explain) now that Obama is the margin hiker in chief.
ZeroHedge blog stops and looks at data to give a grade to our “recovery.”
Recovery? What Recovery? 4 years after central banks have progressively injected over $7 trillion in liquidity into the global markets (and thus, by Fed logic, the economy), and who knows how many trillion in fiscal aid has been misallocated, to halt the Second Great Depression which officially started in December 2007, the US “recovery” is the weakest in modern US history! How many more trillions will have to be printed (and monetized) before the central planners realize that fighting mean reversion by using debt to defeat recore debt, just doesnt’t work? Our guess – lots.
Incidentally, the US has now generated 3 million jobs since the trough of the recession in September 2010, until which point it had previously lost 8 million. Unfortunately, since the real labor force has grown by 4.6 million over the same period, or at the conventionally accepeted 90,000 labor pool entrants per month for 51 months, despite what the BLS may say, because America is after all growing, this means that the Obama administration has created a negative 1.6 million jobs net of demographics, which in turn have cost the US a modest $5.1 trillion in new debt, or an even modest $3.1 million in debt for every job lost.
The durable goods number for January came in at a minus 4.0%. That’s a huge drop, in fact, the largest since January 2009.
Tyler Durden of ZeroHedge blog had analysis:
“And so the transition to the QE3 ‘economic disappointment’ regime begins. Because after the ECB is done with the LTRO it’s over for global QEasing, and the Fed is next. Remember- Bernanke’s semiannual testimony to Congress is tomorrow. Whatever will he say….
Headline Durable Goods plunges from +3.2 to -4% on expectations of -1%
More painfully, Durable goods non-defense ex aircraft down a whopping -4.5% on Exp of -1.3%, down from +3.4%.
Digging between the numbers, via Bloomberg:
Decline in shipments of non-defense capital goods, ex. aircraft, suggests “weak business investment” for 1Q GDP report, says Bloomberg economist Rich Yamarone
Overall decline “mostly” due to contraction in civilian aircraft orders, “slightly” slower pace of new motor vehicles bookings, defense orders, says Bloomberg economist Joseph Brusuelas
Slowdown ex. transport “consistent with the broader slowdown in growth in industrial production.”
ZeroHedge blog puts today’s rosy economic news regarding manufacturing in perspective:
Chalk this one to “seasonal adjustments” or something, cause we no longer have any clue what is going on with the data fudging in America. When it comes to banana republic economic indicators the US is rapidly eclipsing China – case in point the Empire State Manufacturing Survey, which despite seeing the majority, or 6 out of 9 sub indices, declining in February, managed to not only rise, but beat the highest Wall Street estimate, printing at 19.53, the highest since June 2010, on expectations of 15.00, and compared to a previous print of 13.48. What lead to this epic surge? Why nothing short of a decline in just about two thirds of the components: New Orders declined from 21.69 to 22.79, Unfilled Orders declined from -5.49 to -7.06; Inventories declined from 6.59 to -4.71, Prices Paid declined from 26.37 to 25.88; Prices received declined from 23.08 to 15.29, and Number of Employees declined from 12.09 to 11.76. What increased? Shipments, Average Employee Workweek, and, drumroll, Delivery Times. And somehow this disaster of a report is supposed to bring peace and comfort to the market that things are getting better? Perhaps at the Fed’s data manipulation department. And just like a 2.9 million seasonal NFP adjustment in January has resulted in an ebullient market tone, we wonder just how high 3 out of 9 subindices improving will send the market today?
The jobs created came in this morning at 243,000. Estimates, the high ones, had put it at 225,000. The unemployment rate dropped to 8.3%.
How did this happen? Have things improved that much? Didn’t Fed Chair Ben Bernancke this week say the unemployment outlook was not good and would rise? Is it coincidence that this is the time in the election cycle that people lock in their thoughts about the economy?
ZeroHedge blog took a deeper look into this “good news.”
A month ago, we joked when we said that for Obama to get the unemployment rate to negative by election time, all he has to do is to crush the labor force participation rate to about 55%. Looks like the good folks at the BLS heard us: it appears that the people not in the labor force exploded by an unprecedented record 1.2 million. No, that’s not a typo: 1.2 million people dropped out of the labor force in one month! So as the labor force increased from 153.9 million to 154.4 million, the non institutional population increased by 242.3 million meaning, those not in the labor force surged from 86.7 million to 87.9 million. Which means that the civilian labor force tumbled to a fresh 30 year low of 63.7% as the BLS is seriously planning on eliminating nearly half of the available labor pool from the unemployment calculation. As for the quality of jobs, as withholding taxes roll over Year over year, it can only mean that the US is replacing high paying FIRE jobs with low paying construction and manufacturing. So much for the improvement.