Weekly Indicators: "National Beached Whale Day" special edition!

- by New Deal democrat

Yesterday the turkeys were stuffed. Today, it's 300 million stuffed Americans who are imitating beached whales, so keep your belt unbuckled and check out how the high-frequency economic indicators fared last week.

Monthly indicators were mixed. The BEA revised 3rd Quarter GDP down to 2.8%, as expected, due primarily to an increase in imports. On the brighter side, Personal Consumption Expenditures - a measure which generally leads the business cycle - improved, as did personal income and real disposable income. The Case-Schiller house price index continued to show monthly improvement, and better Year over Year comparisons, although still down on that basis. New Home Sales for October also showed improvement. New orders for nondefense capital goods - a Leading Indicator - improved.

Consumer confidence improved from earlier this month, but still declined compared with the last several months. The Chicago Fed’s National Activity Index (CFNAI) stalled, declining slightly for the first time this year. Durable goods declined substantially, a complete surprise compared with expectations. The American Trucking Association also reported a small decline in October traffic, the second in a row. My co-blogger Silver Oz points out that some of the improvement in rail traffic might have to do with substitution effects due to the price of oil.

Now, the high-frequency weekly indicators:

The BLS reported initial jobless claims, seasonally adjusted, were 466,000. On an unadjusted basis they were totaled 543,926. By contrast, last year there were 609,138 initial claims.

The ICSC reported same store retail sales were unchanged from the previous week, and up 3.3% from a year ago, and said

ICSC Research now expects same-store sales for November to increase 4 percent to 6 percent as easy year over year comparisons will dominate the results.

Meanwhile, ShopperTrak

reported that year-over-year GAFO retail sales increased 0.9 percent for the week ending November 21 while sales rose a slight 0.2 percent versus the previous week ending November 14.

GAFO retail sales posted a minimal gain as the previous week contained the Veteran’s Day holiday which allowed consumers an extra day to spend – providing a rather difficult comparison. ShopperTrak noted that in many years the week following Veteran’s Day shows retail sales declines, so even a slight increase could be a good sign for the retail industry heading into Thanksgiving week and Black Friday....

Rail traffic continued to point to bullishness, as intermodal traffic remained stable, while baseline, cyclical, and total traffic went UP! It is particularly bullish that cyclical traffic went up this late in November. (Last week a commenter asked why I use this site vs. the AAR site. The short answer is that I am looking for high-frequency weekly data to see if the economic expansion is stalling or not, and the AAR's report is monthly. The two reports on a monthly basis appear to give virtually identical numbers).

The Daily Treasury Statement for November 24 showed $103.1 million paid withholding taxes so far this month compared with $111.3 on November 24 last year. This is still the best Year-over-Year comparison since March, and while it continues to show great stress in the jobs market as well as for state and local municipalities, it may be bottoming on an absolute basis now.

The Department of Energy's weekly report showed that demand for gasoline, after spending several weeks lower than one year ago, improved last week slightly compared with last year. Refinery stocks are running above average as they have all year.

The Price of Oil fell under $74 on the Dubai investment scare. Given that result, a couple of more middle eastern petrosheikhdoms getting into financial trouble might be kinda nice!

Happy Thanksgiving

To everyone,

We're signing off for the rest of the week. Have a good Thanksgiving.

We'll be back on Monday.

A Personal Note to the Doom and Gloomers from Bonddad

This is Bonddad. I mention that because there are four writers here: me, New Deal Democrat, Invictus and Silver Oz.

I (as in Bonddad) still believe the economy will grow in the 1%-2% range for the next few quarters. I have been saying that for the previous 6 months. Until I see otherwise, I will continue to hold to that prediction. In case you are wondering, there are several reasons for this.

1.) We are use to major quarter to quarter percent changes in PCEs. However, these do not need to grow at a fast pace to add to growth. If we see 1% PCE growth per quarter that will be sufficient for now.

2.) We still have a lot of stimulus money left to spend.

3.) We have a lot of inventories to rebuild.

4.) Exports are increasing. Yes, they are increasing at a slower rate than imports. But the point behind the increase in exports is it shows our trading partners are also growing. And contrary to the great myth of the econo-blogsphere, the US still manufactures a lot of stuff. We just do it with fewer people.

5.) The Fed is keeping rates very low.

I have yet to see any data which seriously undermines the above points.

Now, there are other writers who post here. I asked them to post here because they provide a solid counter-balance to my viewpoint. And unlike the vast majority of doom and gloomers, Silver Oz and Invictus provide thoughtful, well-researched and well-presented presented commentary. They both know the difference between the household and establishment job survey. And they're analysis does not jump around from point to point in an attempt to desperately hold onto a perspective. Instead, they rely on a dispassionate reading of data.

For those of you who are apparently having trouble with reading comprehension, everyone signs off on their work at the bottom of the page. So, before you assign a particular writer's viewpoint to me (or mine to somebody else), please look at the bottom of the page before doing so. It's really not that difficult.

Three steps forward, two steps back

- by New Deal democrat

In addition to the very good (relatively speaking of course) Initial Jobless Claims report this morning (see below), there were 4 other economic releases pushed up to today due to the Thanksgiving holiday. Two were good, two not so good.

Personal income and spending were both up:

Personal income increased $30.1 billion, or 0.2 percent, and disposable personal income (DPI)increased $45.7 billion, or 0.4 percent, in October, according to the Bureau of Economic Analysis.

Personal consumption expenditures (PCE) increased $68.3 billion, or 0.7 percent. In September, personal income increased $20.7 billion, or 0.2 percent, DPI increased $21.3 billion, or 0.2 percent, and PCE decreased $60.3 billion, or 0.6 percent, based on revised estimates.

Real disposable income increased 0.2 percent in October, compared with an increase of 0.1 percent in September. Real PCE increased 0.4 percent, in contrast to a decrease of 0.7 percent.

Shorter good news: consumers have more to spend, and they are spending it. This is necessary for job creation.

Additionally, New Home Sales rose 6.2 percent to an annual pace of 430,000, the highest level since September 2008, the Commerce Department said today in Washington. The median sales price fell 0.5 percent and the number of unsold homes reached a four-decade low.

On the other hand, the University of Michigan "index of consumer expectations fell 2.1 points to 66.5. This is an upward revision from the 63.7 reported in early November, which economists were expecting would be revised to 64.0." This is a leading economic indicator, and while better than most of this year, is still worse than September or October, so this will be a negative.

The other bad news was that orders for durable goods fell during October:

New orders for manufactured durable goods in
October decreased $1.0 billion or 0.6 percent to $166.2
billion, the U.S. Census Bureau announced today. This
was the second monthly decrease in the last three
months. This followed a 2.0 percent September
increase. Excluding transportation, new orders
decreased 1.3 percent. Excluding defense, new orders
increased 0.4 percent.

Despite that, the portion of the durable goods orders that is considered one of the 10 Leading Economic Indicators was up:

Nondefense new orders for capital goods in October
increased $0.6 billion or 1.2 percent to $54.6 billion.

There is some evidence (see, e.g., Invictus' post about the CMI, as well as the American Trucking Association's Index) that manufacturing may have stalled in October. We'll find out a lot more on Monday with the ISM report. Despite that, the majority of the reports are good.
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P.S. While you are doing your annual post-Thanksgiving imitation of a beached whale on Friday, belly up to the computer, because I will be posting the regular "Weekly Indicators" then as usual.

Gold Hits New High

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A.) In September and October, prices rose in a gentler manner. They'd hit a high and the round out the action. This allowed the market to absorb the gains.

B.) So far this month, gold is simply screaming higher.

C.) The RSI is telling us prices are a bit overbought, but

D.) The MACD is saying there is plenty of momentum and

E.) The A/D line is telling us people are still moving into the market.

Also note the EMA situation: the shorter EMAs are above the longer EMAs, all the EMAs are moving higher and prices are above all the EMAs.

This is still a very bullish chart.

Initial Jobless Claims: 466,000 !

- by New Deal democrat

The BLS reported that for the week ending Nov. 21, seasonally adjusted initial jobless claims were 466,000. Last week's number was revised to 501,000. This is the best showing since "Black September" 2008 when the economy nearly ground to a panicked halt.

The 4-week moving average was 496,500, a decrease of 16,500 from the previous week's revised average of 513,000. The 4 week seasonally adjusted moving average is now about 24% lower than the peak of 658,750 on April 3 of this year.

Unadjusted, there were 543,926 new claims, an increase of 68,080 from the week before, and well below the 609,138 initial claims in the same week last year. In unadjusted terms, this was the best new claims number, relative to normal seasonal adjustment, in well over a year.
Because the BLS normally surveys business payrolls in the week ending the 12th of the month, this decrease if it persists won't show up until the December jobs number. If it does, according to my previous research, this indicates that jobs are actually being added to the economy. In this position I am at odds with people like Berkeley Economics Professor Brad DeLong and Calculated Risk, who say that the claims number must drop ot 400,000 before jobs are added. A number like today's is why I said I have no problem being proven wrong, provided that it is done quickly!

In that regard, here is a repost of some numbers I posted two weeks ago:

At the time of the 501,250 4 week average of new jobless claims reading in 1990, payrolls lost 160,000 that month and 211,000 the next. In 2001, the new jobless claims high of 489,250 coincided with payroll losses of 325,000 that month and 292,000 the next. This year, we have already seen in August new jobless claims in the 560,000-570,000 range coinciding with a payroll loss of 151,000.

Treasury Tuesdays

Sorry for being late with this. This week has been very crazy with with are traveling.


A.) Prices broke a two month uptrend

B.) Prices are now in a new uptrend that is confirmed by

C.) A Rising MACD

D.) A very strong A/D line that indicates there is a strong demand for Treasuries and

E.) A rising RSI

I want to return to the strong A/D line as it indicates that even when the market was in a correction in October there was not a flight out of the Treasury market. That is very important considering the equity markets rallied for the first part of October. This tells us there is still an undercurrent of concern in the markets regarding the rally. I think part of this is end of the year, lock in your profits thinking. However, the equity rally is getting thinner -- meaning we're seeing the rally gravitate to the big cap stocks. This is a safety play.

Wednesday Commodities Round-Up

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The main issue with the agricultural prices chart is there is no clear direction either way. There are three different consolidation patterns with no strong up or down move between them. The MACD and RSI confirm there is no momentum in either direction. The EMAs are all moving higher, but they are in a very tight pattern. Prices are simply bouncing from one consolidation pattern to the other.

The only key takeaway from this chart is the accumulation/distribution line which shows that volume is leaving this market.