So looking at the economic data it was a mixed bag.
GDP was revised up not down like I thought but the devil is in the details. Inventory caused the increase up which means much less. The core GDP number which surrounds consumption actually moved down. As a result, not a pretty picture.
Chicago PMI seemed to be smoking. Inventory continues to be restocked. Would expect this another month or two.
Michigan Consumer Sentiment came down but wasn't revised drastically lower.
Finally exiting home sales were like I thought horrible hitting a seven month low causing months of supply of inventory to increase back up to 7.8 months of supply.
Market initially sold off on existing home sales but than got shrugged off.
Actually this all has a theme, once again the market doesn't care about the average American. In fact the market needs the average American to get worse off so the government can keep pumping and even increasing new money that gets recycled back into Wall St.
Its all so surreal.
Subscribe to:
Post Comments (Atom)
6 comments:
In 1982 inventories added to GDP for 5 straight quarters I think...inventories have only been liquidated less quickly, the restocking hasn't even really begun. That could easily add a few percentage points to GDP for the next few quarters.
First - I sent you an email with a graph that should say all that needs to be said.
Second - Starting in 1982 consumption started to really pick up. As this GDP report clearly said (along with most of the other economic data out there), consumption is clearly not increasing.
Without big consumption increases any big up move in manufacturing will end.
The same inventory restocking occurred in 1931. Finally as the graph shows that I emailed, inventory to sales levels are nowhere near lean.
I am not sure what data you are looking at, but in the real world consumption and real final sales are increasing.
Real final sales of domestic product, which is GDP less the change in private inventories, increased at an annual rate of 1.9% in the fourth quarter. That was down from the previous estimate of 2.2%, but higher than the 1.5% rise in the third quarter.
The biggest component of GDP -- consumer spending -- rose 1.7%. Inventory to sales looks like its at the 15 year average.
We can save our arguments for the event next week.
The inventories to sale ratio chart you sent looks like it only went through Q209. Of course it spiked then. It has been drifting back down and is at a 20 year low.
I have so many responses but agree, we will wait until the event Tuesday.
Post a Comment