Data Watch

August surveys of manufacturing have been almost uniformly poor, showing negative growth. It was no surprise that consensus expectations for Industrial Production were low, but the figures came in even lower and the prior month was revised down. The negative YoY trend for the index was thus reinforced, down more than 1%. the subset of Manufacturing Production, that excludes energy production, was also expected to be weak and yet came in even weaker and with the prior month downgrade too. As a result, a sort of promising break to actual growth YoY became a negative YoY trend. Since 1919, a… Read More

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The August NFIB survey fitted in with other industry-side surveys from both manufacturing and services sectors. Current job openings rose quite strong mirroring the Job Openings survey, but it is unclear how meaningful these indicators are. Increased ease of advertising openings may mean there is a secular change occurring in the job search market. It may mean that strong secular change within employment as tech employees are more needed than ever but are hard to find at any price. That said the trend probably means most of all that there is just not enough money or sales to bid up… Read More

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The official PMI from ISM for the huge non-manufacturing sector fell heavily in August. It had been holding up remarkably well at 55 or so, but was oddly above the much poorer trend seen in its less well-established competitor survey of services from Markit. Well, now it has fallen to the same barely growing level of 50. Within the components it seems as if new orders and export orders were very weak, and retail and wholesale trade particularly hit. The employment component did weaken but service sector firms are not yet laying off staff. This is a positive sign for… Read More

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The auguries for the August payrolls have not been good judging by industry-side surveys of August activity, and they still disappointed expectations. Monthly jobs growth was relatively weak. With the participation rate flat there were not enough jobs created to keep pace with entries into the labour force and so the unemployment rate ticked up to 4.9%. No big deal and certainly nothing to move markets or expectations about Fed action. What should trigger Fed action and more concern generally is the very weak Average Weekly Earnings (AWE) number. It is derived from two more commonly watched numbers, Average Hourly… Read More

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July Personal Consumption Expenditure and Personal Income were both in line with expectations. Although June growth was revised up a tiny amount the trends of the last several months were unbroken. Nominal Expenditure has accelerated to 3.8% YoY but only financed by a lower savings rate due Personal Income running at a 3.2% trend. Perhaps confidence amongst consumers has risen, but that does not seem to be the case looking at surveys. While Nominal Disposable Income is running a bit closer to Nominal Personal Expenditure, Disposable Income per capita growth, is in line with nominal weekly wages at an ugly… Read More

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Although July surveys and data appeared mixed, with manufacturing doing OK and services less well, August surveys are running remarkably poorly. First off was NY Empire State manufacturing and it was bad, even if in a volatile series. The Philly Fed was in line for manufacturing within a dull trend but its employment survey was very poor. Markit’s “flash” manufacturing PMI did not follow through on July’s strong data point. Richmond Fed had a very weak reading for manufacturing in an another admittedly volatile series. Its services survey fell back to zero. Today, the “flash” Markit services PMI was weak… Read More

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CPI YoY disappointed the hawks for the third month in a row, and the fourth out of five. Although for many of them one month annualised is often a trend, the less obtuse will see three months of trending lower YoY CPI to just 0.9% as something concrete. Personally, I can’t get my ahead around the point of the trimmed mean CPI as the price level is the thing, not some kooky CPI that excludes stuff, but the hawkish inflation-phobes love it. However, the fact that we have heard a lot less about the trimmed mean assures me that it… Read More

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The Industrial Production and Manufacturing Production figures were a bit better than expected. The IndPro figures MoM were a 2nd positive month and allowed the YoY negative growth rate to shrink to just -0.5% . The Manufacturing Production figures were better than expected but not good enough to raise the rate of YoY growth which shrank again to just 0.4%. Capacity Utilization was a further bright spot. At the end of the day the figures merely confirmed the various surveys of July manufacturing that also suggested a decent month for the sector, at least that is what the regional Fed surveys… Read More

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Misses at both the headline retail sales and core retail sales unnerved markets today. Much lower than expected MoM growth showed up flat at headline and -ve at the core level. Although it is only goods and food service sales (ie restaurants and takeaways, not the full service sector) the divergence seen between weak personal income and stronger personal expenditure may now be starting to close. Growth in nominal retail sales of just 2.25% YoY is a bad sign. The payroll data was quite strong for July last week but some signs of flattening out may be also continuing and… Read More

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The Small Business Confidence Index for July recorded a small miss versus expectations but was still up on the prior month. Employment trends and actual conditions are muted by optimism about the economy as a whole has risen. The overall trend is now one of modest improvement although well down on normal levels for an expansionary period. The NFIB survey echoes other surveys from the two PMIs (ISM and Markit) for manufacturing in particular and from data like payrolls and the broader Change in LMCI. It seems as if the FOMC’s rapid and dovish response to those very poor May… Read More

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