October 3, 2016

Not News Yet: Over 1,000 Non-Citizens Registered to Vote in Va.; ‘Tip of Iceberg’

On Sunday, yours truly posted on the saga of Andrew Spieles, a member of the Young Democrats at James Madison University in Harrisonburg, Virginia who has admitted to submitting fraudulent voter registrations for 19 dead people, and the national press’s virtually complete disinterest in covering the story.

Spieles’ activities, which have gained the attention of but not yet prosecution by law enforcement, represent child’s play in comparison to the horrible findings reported Friday by the Public Interest Legal Foundation (PILF) and the Virginia Voter’s Alliance (VVA) after an investigation relating to only a small portion of the state’s voter-registration rolls.

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August Consumer Spending Declined in Real Terms; Restaurant Industry Is in Contraction, Again

Filed under: Economy,Taxes & Government — Tom @ 12:44 pm

In a report released on Friday, the government reported that “(seasonally adjusted) Real DPI disposable person income) increased 0.1 percent in August and Real PCE (personal consumption expenditures) decreased 0.1 percent.”

In other words, we’re back to flatness:

PersIncomeAndOutlays0816

July’s increase in real PCE was reduced from 0.4 percent to 0.3 percent.

This is not good news for those hoping for a significant third-quarter improvement in economic growth from the first half’s miserable 1.1 percent.

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UPDATE: There’s related bad news from the restaurant industry (HT Zero Hedge) —

RPI drops into contraction territory

Due in large part to declines in both same-store sales and customer traffic, the National Restaurant Association’s Restaurant Performance Index (RPI) fell below 100 in August. The RPI stood at 99.6, down 1.0 percent from a level of 100.6 in July.

“Broad-based declines in the current situation indicators caused the RPI to fall below 100 for the first time in eight months,” said Hudson Riehle, senior vice president of research for the National Restaurant Association. “Restaurant operators reported soft sales and traffic in August, along with corresponding dips in the labor indicators. While the Expectations component of the index remains in expansion territory, it too has trended downward in the past several months.”

operators reported a net decline in customer traffic. Only 21 percent reported an increase in customer traffic between August 2015 and August 2016, while 59 percent reported a traffic decline. August represented the fourth consecutive month in which restaurant operators reported a net decline in customer traffic.

The Zero Hedge post also links to an industry commentator who wrote on Wednesday that “the current wave of (restaurant industry) bankruptcies is definitely unusual, and rivals the chain bankruptcy wave of 2009 and 2010, when several chains filed for debt protection after sales fell.”

August Construction Spending: In the Tank

In a report which would appear to bellwether for yet another mediocre quarter of economic growth, the Census Bureau’s Construction Spending report for August was awful:

The U.S. Census Bureau of the Department of Commerce announced today that construction spending during August 2016 was estimated at a seasonally adjusted annual rate of $1,142.2 billion, 0.7 percent (±1.5%)* below the revised July estimate of $1,150.6 billion. The August figure is 0.3 percent (±1.8%)* below the August 2015 estimate of $1,145.2 billion.

During the first 8 months of this year, construction spending amounted to $755.0 billion, 4.9 percent (±1.2%) above the $720.0 billion for the same period in 2015.

Year-over-year construction spending has now joined the plethora of manufacturing and wholesale reports showing year-over-year monthly declines. According to Zero Hedge, that’s the first year-over-year seasonally adjusted drop in five years.

Other facts:

  • August’s $1.1422 trillion in seasonally adjusted construction spending was the lowest since December, and is 2.9 percent below March’s seasonally adjusted peak of $1.1764 trillion.
  • A look at the raw (i.e., not seasonally adjusted) data indicates that construction spending during the peak season of July and August was up by only 0.3 percent from July and August 2015.
  • July (from $1.1532T to $1.1506T) was revised down in today’s release by $2.6 billion.

Virtually all of the year-to-date gain the Census Bureau cited occurred during this year’s first six months, when the economy’s GDP growth averaged 1.1 percent. The seasonally adjusted average for construction spending for the two months reported thus far in the third quarter of $1.1464T is a tiny amount above the second quarter’s average, and 1.1 percent below the first quarter’s average.

So where is the GDP growth supposed to come from?

In reaction to today’s news, the Atlanta Federal Reserve has just revised its GDP growth prediction for the third quarter down yet again to an annualized 2.2 percent. Its prediction was as high as 3.6 percent in early August. No one should be surprised if the Atlanta Fed reduces that figure further by the time the government releases its official GDP report in late October.

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UPDATE: Today’s news makes a mockery of the claim by the Associated Press’s Martin Crutsinger on Thursday of “new-found strength in business construction” from an “increase in spending on structures” in the final weeks of the second quarter. As seen in this post from last week, it was already an unsupportable claim even before today’s news, but July’s and August’s results demonstrate that any signs of renewed vigor seen in June — a quarter where spending in that category still decreased by an annualized 2.1 percent) have disappeared in the past two months.

September ISM Manufacturing Moves Back Into Expansion at 51.5 Percent, Up From August’s 49.4 Percent; BUT 11 of 18 Industries Are in Contraction

Filed under: Economy — Tom @ 11:43 am

From the Institute for Supply Management (bolds and most paragraph breaks are mine):

Economic activity in the manufacturing sector expanded in September following one month of contraction in August, and the overall economy grew for the 88th consecutive month, say the nation’s supply executives in the latest Manufacturing ISM® Report On Business®.

… The September PMI® registered 51.5 percent, an increase of 2.1 percentage points from the August reading of 49.4 percent.

The New Orders Index registered 55.1 percent, an increase of 6 percentage points from the August reading of 49.1 percent. The Production Index registered 52.8 percent, 3.2 percentage points higher than the August reading of 49.6 percent.

The Employment Index registered 49.7 percent, an increase of 1.4 percentage points from the August reading of 48.3 percent.

Inventories of raw materials registered 49.5 percent, an increase of 0.5 percentage point from the August reading of 49 percent. The Prices Index registered 53 percent in September, the same reading as in August, indicating higher raw materials prices for the seventh consecutive month.

Manufacturing expanded in September following one month of contraction in August, with nine of the 18 industries reporting an increase in new orders in September (up from six in August), and 10 of the 18 industries reporting an increase in production in September (up from eight in August).

Of the 18 manufacturing industries, seven are reporting growth in September in the following order: Nonmetallic Mineral Products; Furniture & Related Products; Textile Mills; Food, Beverage & Tobacco Products; Computer & Electronic Products; Miscellaneous Manufacturing; and Paper Products.

The 11 industries reporting contraction in September, listed in order — are: Printing & Related Support Activities; Petroleum & Coal Products; Wood Products; Apparel, Leather & Allied Products; Transportation Equipment; Machinery; Plastics & Rubber Products; Primary Metals; Fabricated Metal Products; Chemical Products; and Electrical Equipment, Appliances & Components.

The GDP drivers of New Orders and Production are showing expansion. Backlog of Orders, the other direct future GDP indicator went from significant contraction in August (45.5 percent) to nearly breakeven in September (49.5 percent).

While the move back into expansion beats the alternative, this probably means, given what I believe is ISM’s positive selection bias, that manufacturing is pretty close to either very tiny expansion or very tiny contraction.

Zero Hedge notes that the related survey from ISM’s competitor, the Markit US Manufacturing PMI “managed a slightly better than expected 51.5 final print for September.” That’s a three-month low, and Markit’s accompanying report (per ZH) indicates that “Manufacturing growth slowed to a crawl in September, suggesting the economy is stuck in a soft-patch.”

Positivity: Vin Scully’s final message as he signs off on his final broadcast

Filed under: Positivity — Tom @ 8:46 am

Baseball broadcaster Vin Scully ended his career as a baseball announcer for the Los Angeles Dodgers after 67 years, a run that is almost certain will never be duplicated again.

Here was his final message yesterday as he signed off from his final game Watch:

His message to his millions of fans:

May God give you
For every storm a rainbow,
For every tear a smile,
For every care a promise,
And a blessing in each trial,
For every problem life seems a fateful friend to share,
For every sigh a sweet song, and
An answer for each prayer.

Monday Off-Topic (Moderated) Open Thread (100316)

Filed under: Lucid Links — Tom @ 6:00 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.

Press Minimizes Exposure of Hillary’s ‘Living in Basement’ Ridicule of Millennials

The press is going to extraordinary lengths to minimize the visibility of Hillary Clinton’s damaging and disparaging February remarks at a fundraiser about how Bernie Sanders’ supporters “are living in their parents’ basement,” and how half of them don’t know what (‘just like Scandinavia’) means” — stereotyping digs which wouldn’t survive even the most rudimentary efforts at fact-checking.

The New York Times appears to have decided to completely ignore Mrs. Clinton’s remarks, because “news” relating to 20 year-old items — namely the likely illegally obtained Donald Trump tax return data and remarks that the Republican nominee could have made about a Miss Universe pageant winner’s weight, a condition for which he could have taken her crown away, and didn’t — are “obviously” far more important.

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