November 25, 2015

Positivity: Pre-Thanksgiving Perspective

Filed under: Positivity — Tom @ 7:00 pm

Note: A slightly different version of this post originally went up in November 2007, and has turned into a BizzyBlog tradition.

__________________________________

I saw this about halfway through this post at Obi’s Sister. It was written to make a political point, which is fine, but it also makes a universal one (paragraphing added by me):

A neighbor (say her name is Mary) sees her other neighbor (say her name is Nancy) and decides to make her a pie. She bakes a lovely pie the next day and takes it next-door. Nancy is overwhelmed that her neighbor would be so thoughtful and thanks her profusely.

The next week, Mary makes her another pie. When she takes it over, Nancy thanks her again, but with less enthusiasm.

The next week, Mary makes her another pie. When she takes it over, Nancy just says “Thanks.”

The next week, Mary makes her another pie. When she takes it over, Nancy says, “Thanks, and you’re a day late this time.”

The next week, Mary makes her another pie. When she takes it over, Nancy says “Thanks, but next time, can you make a cherry pie instead of apple? I’m getting tired of apple.”

The next week, Mary makes her another pie. When she takes it over, Nancy says “You know, if you put a little less sugar in the crust and didn’t handle it so long, the crust wouldn’t be tough.”

The next week, Mary has lots to do and forgets to make her pie. When she walked by Nancy’s house, she stuck her head out the door and yelled, “Hey! Where’s my pie?”

How quickly gratitude turns into a jaded sense of entitlement.

…. Why don’t we go back to the original idea? Simple people, pioneers really, expressing their pure and heartfelt gratitude …. A humble heartfelt thanksgiving. Not a holiday, but a state of mind.

Happy Thanksgiving, everyone.

October Durable Goods: Orders Up 3.0 Pct. (But Down Slightly ex-Aircraft), Shipments Down 1.0 Pct.; Raw Numbers Are Worse

Filed under: Economy,Taxes & Government — Tom @ 10:58 am

A mixed bag, but with more coal than presents, from the Census Bureau:

New Orders

New orders for manufactured durable goods in October increased $6.9 billion or 3.0 percent to $239.0 billion, the U.S. Census Bureau announced today. This increase, up following two consecutive monthly decreases, followed a 0.8 percent September decrease. Excluding transportation, new orders increased 0.5 percent. Excluding defense, new orders increased 3.2 percent.

Transportation equipment, also up following two consecutive monthly decreases, led the increase, $6.1 billion or 8.0 percent to $82.1 billion.

Shipments

Shipments of manufactured durable goods in October, down two of the last three months, decreased $2.5 billion, or 1.0 percent, to $240.1 billion. This followed a 0.2 percent September increase.

…  Inventories

Inventories of manufactured durable goods in October, down five of the last six months, decreased $0.7 billion, or 0.2 percent, to $397.4 billion. This followed a 0.6 percent September decrease.

The good news on orders is that they went up. The not-so-good news is that but for the big increase in the volatile nondefense aircraft and parts (+$7.8 billion), net orders in all other sectors declined by $0.9 billion.

Not seasonally adjusted October orders of $240.2 billion trailed October 2014 by 1.0 percent. This is seventh straight year-over-year monthly decline.

Not seasonally adjusted October shipments of $246.2 billion trailed October 2014 by 1.7 percent. This is a rare year-over-year decline in this area — only the second in the almost six years, and the biggest such decline since December 2009.

The inventory come-down is necessary from a business standpoint, but it’s probably going to hurt fourth-quarter GDP.

Overall, the trends here are decidedly not our friends.

New-Home Sales: Annualized 495K in Oct.; Previous 3 Months Revised Down by a Total of 40K

Filed under: Economy,Taxes & Government — Tom @ 10:37 am

From the Census Bureau:

Sales of new single-family houses in October 2015 were at a seasonally adjusted annual rate of 495,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 10.7 percent (±17.7%)* above the revised September rate of 447,000 and is 4.9 percent (±17.6%)* above the October 2014 estimate of 472,000.

Today’s result was in the expected range of 490K to 504K, but previous month revisions reduced July through September sales by a total of 40K:

NewHomeSales0106to1015

Given that the three previous months got revised down today, it’s not unreasonable to believe that today’s not-great, not-terrible number won’t hold up in future revisions.

If Consumers Are Going to Save the Day, They’d Better Show Up Soon

Filed under: Economy,Taxes & Government — Tom @ 9:56 am

The Bureau of Economic Analysis has just told us that personal income went up nicely in October, but that people didn’t spend the extra money:

Personal income increased $68.1 billion, or 0.4 percent, and disposable personal income (DPI) increased $56.8 billion, or 0.4 percent, in October, according to the Bureau of Economic Analysis. Personal consumption expenditures (PCE) increased $15.2 billion, or 0.1 percent. In September, personal income increased $27.4 billion, or 0.2 percent, DPI increased $27.0 billion, or 0.2 percent, and PCE increased $9.5 billion, or 0.1 percent, based on revised estimates.

Real DPI increased 0.4 percent in October, compared with an increase of 0.3 percent in September. Real PCE increased 0.1 percent in October, the same increase as in September.

Additionally, as seen in the second of the two tables which follow, spending increases in previous months were were revised significantly downward, despite income increases getting revised upward:

IncomeAndOutlaysTo1015

Here’s the underlying data for this year, which shows a 2.1 perent increase through 10 months:

PCE2015

Since it came out only a day after GDP, I wouldn’t know whether today’s downward revisions were or weren’t considered in yesterday’s GDP report. If they weren’t, the above data, which shows PCE increasing by just 0.6 percent in the third quarter (2.4 percent annualized), would seem to dictate the need to take what the government reported yesterday — a 3.0 percent annualized increase in PCE — down significantly. If they were, yesterday’s result doesn’t seem defensible.

(UPDATE, Nov. 27: The Atlanta Fed reduced its fourth-quarter forceast from 2.3 percent to 1.8 percent based on today’s news. So if the government didn’t bake today’s income/outlays news into yesterday’s GDP report, it seems that the third quarter will be revised down in late December by a more than minor amount.)

In general — It’s more money, but barely more consumption. I say, with support found here, that the explanation is higher debt payments, which aren’t part of consumption, but certainly work to empty consumers’ pockets.

Initial Unemployment Claims (112515): 260K SA; Raw Claims 12 Pct. Below Same Week Last Year

Filed under: Economy,Taxes & Government — Tom @ 8:37 am

Predictions were for 270,000 to 272,000 seasonally adjusted claims, which averages out to the same as last week.

Here are the key paragraphs from the Department of Labor’s report released at 8:30:

SEASONALLY ADJUSTED DATA

In the week ending November 21, the advance figure for seasonally adjusted initial claims was 260,000, a decrease of 12,000 from the previous week’s revised level. The previous week’s level was revised up by 1,000 from 271,000 to 272,000. The 4-week moving average was 271,000, unchanged from the previous week’s revised average. The previous week’s average was revised up by 250 from 270,750 to 271,000.

… UNADJUSTED DATA

The advance number of actual initial claims under state programs, unadjusted, totaled 305,757 in the week ending November 21, an increase of 40,941 (or 15.5 percent) from the previous week. The seasonal factors had expected an increase of 54,977 (or 20.8 percent) from the previous week. There were 357,202 initial claims in the comparable week in 2014.

I’m not sure why raw claims would have topped 300,000 for the first time in a while, but apparently, given both years’ relatively high seasonal adjustment factors (117.5 this year, 118.0 last year), the last full week before Thanksgiving typically has a higher level of claims than previous weeks.

So there’s nothing particularly cheering or alarming here.

Wednesday Off-Topic (Moderated) Open Thread (112515)

Filed under: Lucid Links — Tom @ 6:05 am

This open thread is meant for commenters to post on items either briefly noted below (if any) or otherwise not covered at this blog. Rules are here.