Friday, September 25, 2009

The Week in Review: A mixed bag

- by New Deal democrat

Here we are at Friday afternoon again, and before Bonddad posts his much awaited photos and calls it a weekend, let's quickly recap the week.

Unlike last week, which was a full-throated battle cry of bullish data, this week was more of a mixed bag:

- Leading economic indictors for August went up 0.6% and July was revised higher 0.3%, but the underlying data is mainly already known.

- Initial Jobless Claims fell to 530,000, suggesting that the economy is getting closer to the point where it actually starts to create more jobs than it loses.

- Existing Home sales fell slightly in August. The market was apparently expecting Nirvana, and this hiccup (sales are still up YoY for the third month) helped cause a sell-off.

- Durable goods orders (which Bonddad sometimes calls "the Boeing report" because of the heavy influence of aircraft orders) fell -2.4%, taking back about half of the July gain. Ex-aircraft, the series was unchanged. The decline in capital new orders is troubling, but was already factored into the August LEI report so may have no effect.

- U. of Michigan consumer confidence for September rose to 73.5, up from August's 65.7, far above expectations. More importantly, the leading indicator of consumer expectations rose to 73.5, its highest since before the Recession.

- New Home Sales were reported up by the Census Bureau to 429,000 a whopping 3,000 more than the revised July report, i.e., not nearly as much as had been expected.

- the weekly Railcar report showed stabilization after last week's decline. YoY figures generally continue to improve.

- the American Trucking Association reported that its "Truck Tonnage Index increased 2.1 percent in August, matching July’s increase of the same magnitude.... Compared with August 2008, SA tonnage fell 7.5 percent, which was the best year-over-year showing since November 2008."

- Shoppertrak reported that "year-over-year retail sales declined 4.5% for the week ending Sept. 19, ... [but] current sales for the month of September versus last year are only down 1.0%."

The takeaway this week is that the Recovery proceeds but subject to what Bonddad has called "fits and starts." The leading components so far suggest that September's LEI will remain positive, but significantly weaker than the last 5 months.

In the meantime, let's wait on Bonddad's pix and have a nice weekend!