



During the week of April 12–18, 2010, temporary and contract employment increased 1.77%
Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- increased at an annual rate of 3.2 percent in the first quarter of 2010, (that is, from the fourth quarter to the first quarter), according to the "advance" estimate released by the Bureau of Economic Analysis. In the fourth quarter, real GDP increased 5.6 percent.
The Bureau emphasized that the first-quarter advance estimate released today is based on source data that are incomplete or subject to further revision by the source agency (see the box on page 3). The "second" estimate for the first quarter, based on more complete data, will be released on May 27, 2010.
The increase in real GDP in the first quarter primarily reflected positive contributions from personal consumption expenditures (PCE), private inventory investment, exports, and nonresidential fixed investment that were partly offset by decreases in state and local government spending and in residential fixed investment. Imports, which are a subtraction in the calculation of GDP, increased.
The deceleration in real GDP in the first quarter primarily reflected decelerations in private inventory investment and in exports, a downturn in residential fixed investment, and a larger decrease in state and local government spending that were partly offset by an acceleration in PCE and a deceleration in imports.
Real personal consumption expenditures increased 3.6 percent in the first quarter, compared with an increase of 1.6 percent in the fourth. Durable goods increased 11.3 percent, compared with anincrease of 0.4 percent. Nondurable goods increased 3.9 percent, compared with an increase of 4.0 percent. Services increased 2.4 percent, compared with an increase of 1.0 percent.
Real nonresidential fixed investment increased 4.1 percent in the first quarter, compared with an increase of 5.3 percent in the fourth. Nonresidential structures decreased 14.0 percent, compared with a decrease of 18.0 percent. Equipment and software increased 13.4 percent, compared with an increase of 19.0 percent. Real residential fixed investment decreased 10.9 percent, in contrast to an increase of 3.8 percent.
Real exports of goods and services increased 5.8 percent in the first quarter, compared with an increase of 22.8 percent in the fourth. Real imports of goods and services increased 8.9 percent, compared with an increase of 15.8 percent.
The change in real private inventories added 1.57 percentage points to the first-quarter change in real GDP after adding 3.79 percentage points to the fourth-quarter change. Private businesses increased inventories $31.1 billion in the first quarter, following decreases of $19.7 billion in the fourth quarter and $139.2 billion in the third.
1. The Economy is recovering; The recession is over: Of that, we have no doubt, as the data is clear. The free fall of 2008-09 is over, and a gradual improvement is seen across the board. Industrial manufacturing, exports, autos, retail sales, durable goods, travel all confirm the economy is “healing.”
2. But, the recovery is “Lumpy”: — Part of the reason some people doubt the recovery story is how unevenly distributed the improvements are. Geographically, much of the country is still soft. In retail, it is pent up demand plus luxury goods. In technology, its mobile devices and consumer products. Financial firms are taking advantage of the steep yield curve and ZIRP to arbitrage profits, as opposed to actually lending. Profits are not evenly distributed either.
3. Government spending is only part of the story: In the midst of the crisis, Credit froze, the consumer panicked, and business spending looked to be going extinct. Uncle Sam temporarily bridged the gap.
But the argument that government spending is the only game in town is overstates the case. Private sector CapEx spending and hiring is improving (albeit slowly); Consumers have come out of their bunkers and are dining out, going to the movies, hitting the malls, traveling.
We have not returned to the Home ATM days of 2004-07 — and probably wont in our lifetimes — but the present environment is a massive improvement from the 2008-09 contraction.
Barry should have been reading us; we called it over last August:
1.) The Leading Economic Indicators are pointing up strongly.2.) Housing sales have bottomed
3.) Housing starts have bottomed
4.) Home builders confidence is increasing
5.) The stock market is rebounding
6.) Credit spreads are at low levels
7.) Traders have moved out of Treasuries and into corporate, junk and mortgage backed bonds
8.) The manufacturing indexes have been improving since the first part of the year and are now printing positive numbers
9.) Initial unemployment claims -- while still high -- have dropped and the rate of job losses has decreased.
10.) Other countries are now printing positive GDP numbers.
Since then we've seen continued improvement.
I should also add the economy is currently expanding in pretty much the manner I outlined last August.
Initial jobless claims fell in the April 24 week to 448,000 vs. 459,000 in the prior week, which is revised 3,000 higher. The four-week average is up 1,500 to 462,500 and compares negatively with 448,000 at the end of March.
Both the SPYs and the QQQQs gapped a bit higher at the open, but then essentially moved sideways for the remainder of the day. This is a good development, especially in relation to the previous days trading where the markets dove lower on news from Europe. On the three daily charts, notice that prices found support at daily EMA levels:
The SPYs found upside resistance at the 20 day EMA.
On the daily chart of the TLTs, notice that prices are falling back to the downward sloping line of resistance (now support). That is an important development. Treasuries caught a strong safety bid at the beginning of the week as a reaction to the European situation. But the upward move ran against a big fundamental issue of increasing supply and a long-term head and shoulders pattern. In other words -- there are strong downward pressures in the market as well. Yesterday's move could indicate that the supply issue is still very strong in the market.
What I personally find very interesting right now is gold. First,
However, in the last two days at (a) we've seen two large bars printed on very high volume (b). In addition, the EMA picture (c) is bullish -- the shorter EMAs are above the longer EMAs, all the EMAs are moving higher and prices are above the EMAs. However, this is not the strongest upward move possible -- and certainly not the one I would expect considering the overall macro environment. I would expect a far stronger move.
General Electric Co. said Wednesday that the broader economy and its own industrial and lending businesses are improving, signs the "clouds are breaking" after one of the worst years ever for the company.Some key economic indicators have stabilized, including the high unemployment rate and the decline in housing prices, GE told investors at its annual meeting in Houston. Bank losses have stopped growing and capital markets have improved, a positive sign for GE's troubled GE Capital lending unit that has been the source of many of its problems.
"The forecast ahead of us is promising," said GE chief executive Jeffrey Immelt.
We promised we would update the US Treasury individual tax withholdings comparison between 2009 and 2010 by 4 week bucket. Week 16 data is now out and the result is below. It speaks for itself. As for withheld corporate tax, we would discuss that too... if there was anything to discuss.
Consumers’ appraisal of present-day conditions was more positive in April. Those claiming conditions are "good" increased to 9.1 percent from 8.5 percent, while those claiming business conditions are "bad" declined to 40.2 percent from 42.1 percent. Consumers’ appraisal of the labor market also improved. Those saying jobs are "plentiful" increased to 4.8 percent from 4.0 percent, while those saying jobs are "hard to get" decreased to 45.0 percent from 46.3 percent.Consumers’ outlook was also brighter in April. The percentage of consumers expecting business conditions will improve over the next six months increased to 19.8 percent from 18.0 percent, while those expecting conditions will worsen declined to 12.6 percent from 13.6 percent.
Consumers were also more optimistic about the job outlook. The percentage of consumers anticipating more jobs in the months ahead increased to 18.0 percent from 14.1 percent, while those anticipating fewer jobs declined to 20.0 percent from 21.4 percent. The proportion of consumers anticipating an increase in their incomes declined to 10.3 from 10.8 percent.
The real story here is the straight line for the last year; consumers are definitely in a "show me" state of mind.
Shipping giant UPS is optimistic about the economic recovery it is seeing in countries where it does business around the world.The company made the comments as it formally reported Tuesday a nearly 33 percent rise in first-quarter profit to $533 million, or 53 cents a share, compared to a profit of $401 million, or 40 cents a share, a year earlier.
UPS, based in Atlanta, pre-released earnings results on April 14.
That story got me thinking about the transport average:
There is a clear uptrend in place (a) and prices have broken through important resistance (b). The EMA picture is bullish (the shorter EMAs are above the longer EMAs, all the EMAs are moving higher and prices are above all the EMAs). However, momentum is near a topping out point (d) but there is plenty of money flowing into the average (e).
This month's new vehicle sales (including fleet sales) ... are expected to be 988,100 units, a 20.9 percent increase from April 2009 and a 7.1 percent decrease from March 2010....This conflicts sharply with the rumors coming out of Satwaves (Satellite Radio news and information), which had reported that:
"In March, incentives really helped boost car sales — especially [for] Toyota.... In April incentives averaged nearly $200 less per vehicle industry-wide and sales fell along with incentives." ....
Edmunds.com analysts predict that April's Seasonally Adjusted Annualized Rate (SAAR) will be 11.2 million, down from 11.8 in March 2010.
According to another Satwaves source, sales are off the charts across the board with Ford (NYSE:F) once again posting exceptional sales numbers, especially Taurus and Fusion sales. My source indicated that the SAAR rate could surpass the 14 million unit mark when the April sales numbers are reported. Such a number would dwarf Sirius XM Radio’s (NASDAQ: SIRI) guidance of 10.5 million, as well as analyst estimates of just 11 million units.
Crushed Stone and Lumber are the two leading indicators of new construction (commercial and residential). Tracking these two economically sensitive commodities gives an up to the minute view of future construction. Recession or full-blown depression? These commodities could be key leading indicators. As with all Railshare data, these charts track shipments through the week ending on the preceding Saturday.