July 27, 2015

Press Mostly Fails to Report Union Exemptions in Some Minimum-Wage Laws

I guess the slogan of labor has changed from “Look for the union label” to “Look for the union waiver.”

The Los Angeles Times published a long front-page story early this morning on an issue some people thought disappeared after its initial exposure two months ago. The issue is whether union workers should be exempt from minimum wage laws, especially the sky-high minimums being enacted in some U.S. cities. To those who have been unaware of the issue up until now and are thinking that all of this must be a joke — it’s not. It’s just that the press, which not coincidentally has a higher percentage of union members than the private sector as a whole, has barely noted it.


AP’s Ken Sweet Plays Stall-Ball, Waits Four Paragraphs to Disclose Size of Historic Chinese Stock Dive

Based on how they handled it today, it’s pretty obvious that the Associated Press’s Ken Sweet and his wire service’s headline writers want the lowest possible number of users of their reporting — consumers and subscribing print and broadcast outlets — to know about the mainland Chinese stock market’s historically deep 8.5 percent Monday dive.

It took four paragraphs for Sweet to get to the specifics. What preceded it was clearly intended to create an “It’s No Big Deal, so you can move on to something else” impression.


June’s Advance Durable Goods: +3.4 Percent, 2nd Quarter Net Decline of 0.5%; Year-Over-Year June Raw Shipments Up 3.2 Percent

Filed under: Economy,Taxes & Government — Tom @ 8:29 am

Durable goods orders is the final significant hard data element to be reported before Thursday’s report on Gross Domestic Product. The GDP report will include a multi-year revision in addition to second-quarter results,

Orders are expected to increase significantly due to an apparently known pickup in aircraft orders, but there is a wide variance in predictions. According to Yahoo’s economic calnendar, Briefing.com is predicting +5.5, while the “market” is going with +3.0 percent. That calendar also indicates that the previous month’s initial figures have been revised down to -2.2 percent from -1.8 percent.

Core duarable orders are expected to come in at +0.5 percent by Briefing.com and the “market.”

It will also be worth seeing how badly this year’s shipment, especially core shipments, continue to lag last yeear’s, which seems likely.

We’ll see here at 8:30.


New Orders

New orders for manufactured durable goods in June increased $7.7 billion or 3.4 percent to $235.3 billion, the U.S. Census Bureau announced today. This increase, up following two consecutive monthly decreases, followed a 2.1 percent May decrease. Excluding transportation, new orders increased 0.8 percent. Excluding defense, new orders increased 3.8 percent.

… Shipments

Shipments of manufactured durable goods in June, up following two consecutive monthly decreases, increased $0.3 billion or 0.1 percent to $239.4 billion. This followed a 0.3 percent May decrease.

… Inventories

Inventories of manufactured durable goods in June, up twenty-four of the last twenty-five months, increased $1.6 billion or 0.4 percent to $402.3 billion. This was at the highest level since the series was first published on a NAICS basis in 1992 and followed a 0.2 percent May decrease.

Considering revised changes of -1.7 percent and -2.1 percent in April and May, respectively, the net seasonally adjusted decrease during the quarter was -0.5 percent (.983 x .979 x 1.034).

There is good news on shipments. Raw shipments of $260.7 billion in June came in 3.2 percent ahead of the $252.6 billion seen in June 2014, a big improvement over May’s 0.3 percent year-over-year increase. Continued increases of this size will justify the unadjusted inventory buildup of 3.7 percent, but reversions back to what we saw in May won’t.

It would be even nicer if the rest of manufacturing and the wholesale sector were showing sales increase. They’re not — which lead inevitably to the mystery of how GDP can be higher at all than last year at this time when so many key elements of it are lower.

Speaking of GDP, Yahoo’s calendar currently shows an unusually large variance between the Briefing.com prediction on an annualized 1.3 percent increase and the “market” prediction of 2.6 percent. Meanwhile, the Atlanta Fed’s model is predicting +2.4 percent as of July 17, and Moody’s currently has +3.0 percent.


UPDATE: Zero Hedge claims that today’s report shows that a recession in imminent, but is basing it on a claimed “month over month 3.1% unadjusted decline I haven’t been able to verify.

My take is that today’s report isn’t all that bad, but is far from what we need to be seeing.

UPDATE 2, 11:35 A.M.: AP’s coverage of durable goods predicts 2.5 percent annualized second quarter GDP growth.

AP’s Obsessed Weissert Whines About Perry’s ‘Pricy’ and ‘High-Powered’ Legal Team

2016 GOP presidential candidate and former Texas Governor Rick Perry is fighting a legal battle against an out-of-control Lone Star State county. That county’s prosecutor has sued Perry, claiming that a) he committed an illegal act of “coercion” by threatening to veto legislation funding a “public integrity” office headed by Travis County’s Rosemary Lehmberg, who was convicted of drunk driving in 2013 but refused to resign; and b) that he committed another illegal act by carrying out his veto promise. In effect, the county wants to criminalize Perry’s exercise of his then-gubernatorial duties.

A Texas Court threw out the “coercion” contention on Friday. The Associated Press’s Will Weissert, who has demonstrated consistent hostility towards Perry in recent years while somehow retaining employment as an allegedly objective journalist, was quite displeased. He whined about Team Perry’s lawyers doing all they can to defend him — twice — while making sure readers know that the politician he so despises is not catching on very well as a candidate for the GOP nomination.


July 25, 2015

Not News: Coal CEO Decries EPA’s ‘Political Power Grab of America’s Power Grid’

In a speech at a Republican Lincoln Day dinner in West Virginia earlier this week, Murray Energy Corp. founder and CEO Robert Murray decried the Obama administration’s determination to, as described at the financial news site SNL.com (to be clear, no relation to Saturday Night Live), “bypass the states and their utility commissions, the U.S. Congress and the Constitution in favor of putting the U.S. EPA in charge of the nation’s electric grid.”

In the establishment press, Murray’s speech was only covered in a single snarky paragraph by Darren Goode at the Politico titled “Don’t Hold Back Now” — obviously attempting to paint Murray as unreasonable and extreme — and a writeup at the Wheeling (WV) Intelligencer. After all, what does Murray know? He’s only the head of the largest company in an industry which is still responsible for fueling 39 percent of America’s electrical grid, and the majority of it in many states. Who would want to give him any visibility, as if he has anything valuable to say? Well, I do.


July 24, 2015

Sympathetic AP on Hillary Emails: Darn It, They’re Such a Distraction

The press — especially the Associated Press — wants everyone to know that the email controversy “swirling” around her is partisan and distracting. Why anyone would worry about its national security or legal implications is almost completely lost on them. That’s their story, and they’ve been sticking to it for months.

The latest installment from the AP came tonight from Lisa Lerner, Eric Tucker and three other contributing reporters. Even though it’s at the core of the firestorm over her undisclosed use of a private server out of her home, the term “national security” didn’t appear until Paragraph 17 — and even then it was in a quote from a Republican. The big problem, from the AP team’s perspective, is capsulized in their report’s pity-party headline and opening paragraphs (bolds are mine):


As New-Home Sales ‘Unexpectedly’ Dive, AP’s Boak Says They’re Just ‘Not As Hot’

Thanks to year-over-year declines in manufacturing orders, manufacturing shipments, and wholesale sales, along with bloated inventories, apologists for the current condition of the U.S. economy are down to three defenses supposedly demonstrating that all is still really well after yet another rough first quarter (once again excused away as due to supposedly historically awful winter weather).

One of the three is that the housing market, particularly for new homes, is in a genuine recovery. Effective today, we can scratch at least the new-home element of that claim. The Census Bureau told us today that seasonally adjusted new-home sales fell by 7 percent in June, after May’s originally strong figure was also revised down by 5 percent. The raw data showed that the number of new homes sold in June — supposedly peak season for new home purchases — was the same as the number sold in February.


Another ‘Unexpected’ Occurrence: New-Home Sales Fizzle During Peak Season

Filed under: Economy,Taxes & Government — Tom @ 10:29 am

So much for the housing recovery, for the umpteenth time, from the Census Bureau:

Sales of new single-family houses in June 2015 were at a seasonally adjusted annual rate of 482,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 6.8 percent (±12.5%)* below the revised May rate of 517,000, but is 18.1 percent (±18.1%) above the June 2014 estimate of 408,000.

May was 546,000 in last month’s report, but got revised downward by 5 percent.

June’s seasonally adjusted annualized 482,000 is the lowest figure of the year, the lowest figure since November of last year, and is only 4 percent higher than June 2013.

Zero Hedge agrees: “There goes the housing recovery — again.”

July 23, 2015

Initial Unemployment Claims (072315): 255K SA (A Dubious 45-Year Low); Raw Claims (263K) 8 Percent Below Same Week Last Year

Filed under: Economy,Taxes & Government — Tom @ 12:17 pm

From the Department of Labor:


In the week ending July 18, the advance figure for seasonally adjusted initial claims was 255,000, a decrease of 26,000 from the previous week’s unrevised level of 281,000. This is the lowest level for initial claims since November 24, 1973 when it was 233,000. The 4-week moving average was 278,500, a decrease of 4,000 from the previous week’s unrevised average of 282,500.


The advance number of actual initial claims under state programs, unadjusted, totaled 262,981 in the week ending July 18, a decrease of 81,382 (or -23.6 percent) from the previous week. The seasonal factors had expected a decrease of 54,210 (or -15.7 percent) from the previous week. There were 287,049 initial claims in the comparable week in 2014.

The “record” achievement is VERY dubious, given that this year’s seasonal factor of 103.3 is significantly higher than the factor for the same week last year of 99.4 for no apparent reason. Both weeks were full weeks of business unaffected by holidays.

If last year’s factor had been used on this year’s raw claims, the result would have been 10,000 claims higher; 262,981 divided by .994 is 265,000, rounded. That would have only been the lowest figure since May 9, i.e., a whole 2-1/2 months ago.

All of that said, it is nice to see raw claims trailing last year by 8.4 percent. It would be nicer if that would continue. We’ll see if it does.

July 20, 2015

AP and the Hill Look at the Same Business Survey, Draw Up Sharply Different Reports

The National Association of Business Economics released its quarterly survey of its members’ take on the state of the current and future economy today.

Given that the survey only had 112 responses, it’s probably not a good idea to generalize too much about its results. That didn’t stop The Hill from headlining Vicki Needham’s writeup by far too optimistically declaring that “Business leaders expect strong finish to 2015.” In an upset, possibly indicating that today’s scheduled koolaid delivery intended for the Associated Press got misdirected to and doubled up at the Hill’s offices, the wire service’s Christopher Rugaber — looking at the same survey — wrote that “U.S. businesses’ outlook on sales in the coming months has darkened.”


AP, Reuters Fail to Connect Latest A&P Bankruptcy to Its Unions

The company officially known as the Great Atlantic & Pacific Tea Co. has filed for bankruptcy for the second time in five years. This time around, the storied “A&P” name may completely disappear.

Coverage at USA Today by Nathan Bomey notes that “About 93% (of its workers) are represented by one of 12 different unions, and many of them have bumping rights that the company has described as a big barrier to reducing costs.” Coverage at two of the three major business wire services, the Associated Press and Reuters, failed to mention the word “union” at all.


July 17, 2015

Housing: It’s All About the Rent, ‘Bout the Rent (Not Buying)

Filed under: Economy,Taxes & Government — Tom @ 10:17 am

From Zero Hedge, in reaction to the Census Bureau’s June New Residential Construction report:

… in the New Paranormal, it is all about renting.

Moments ago the Census Bureau released the housing starts and permits data for June. And, sure enough, when it comes to single-family starts and permits, there was barely much of a change: in June single-family starts (blue line) declined from 691K to 685K, the lowest level since March. However it was the Multi-family, aka rental housing (red line), where the action has never rarely been more frantic …

… But this was nothing compared to what is just over the horizon, aka in permits, where single-family against as barely notable, rising to 687K, or about half the pre-crisis peak. But, once again, it was multi-family units where all the action was …

It also means that a conventional housing recovery in the US is now dead: the builders have spoken and what the next generation wants is to rent, not to buy.

More “fundamental transformation.”

July 16, 2015

Initial Unemployment Claims (071615): 281K SA; Raw Claims (344K) Down 7 Percent From Same Week Last Year

Filed under: Economy,Taxes & Government — Tom @ 10:20 am

From the Department of Labor:


In the week ending July 11, the advance figure for seasonally adjusted initial claims was 281,000, a decrease of 15,000 from the previous week’s revised level. The previous week’s level was revised down by 1,000 from 297,000 to 296,000. The 4-week moving average was 282,500, an increase of 3,250 from the previous week’s revised average. The previous week’s average was revised down by 250 from 279,500 to 279,250.


The advance number of actual initial claims under state programs, unadjusted, totaled 344,002 in the week ending July 11, an increase of 40,416 (or 13.3 percent) from the previous week. The seasonal factors had expected an increase of 59,887 (or 19.7 percent) from the previous week. There were 370,559 initial claims in the comparable week in 2014.

The seasonal factors this year and for the same week last year are virtually identical (122.6 and 122.2, respectively), but they seem a bit high, and likely contributed more to today’s seasonally adjusted drop than anything substantive in the job market.

Next week’s factor drops to about 103, and the next 11 weeks are in the 70s and 80. Weekly claims are going to have to come in below 250K if seasonally adjusted claims are to stay below 300K.

This quarter’s “Covered Employment” — the number of workers eligible for benefits if they’re let go — rose to 134,803,907 from 134,074,626 in the second quarer, when this figure finally exceeded the previous late-2008 peak of 133,902,387.

July 15, 2015

Hiding the Decline, Again: AP’s Rugaber Fails to Note Falling Shipments as Explanation For Flat Manufacturing Output

The serious sales slumps combined with inventory buildups in manufacturing and wholesale industries, documented in previous NewsBusters posts here, here, here, and here — that’s just in the past ten days — continues. So does the establishment press’s determination to ignore them.

At the Associated Press today, Christopher Rugaber was tasked to cover the Federal Reserve’s June release on Industrial Production. The good news is that the Fed report showed an overall increase (+0.3 percent) for the first time in three months. The bad news is that none of it came in manufacturing, which was flat as a pancake for the second straight month. The net sum of the monthly manufacturing declines so far this year is -0.3 percent. While Rugaber concentrated his attention where it belonged, i.e., on manufacturing, since it makes up 75 percent of all industrial activity, he still managed to come up with all kinds of explanations for the lack of progress — except the two most obvious (bold is mine):


July 14, 2015

AP’s Crutsinger Hides Another Year-Over-Year Decline, This Time in Manufacturing and Trade Sales

First, the good news. The Associated Press’s Martin Crutsinger didn’t handle his coverage of today’s release of May’s “Manufacturing and Trade Inventories and Sales” report by the Census Bureau as incompetently as he did the report on wholesale sales and inventories he filed on Friday. Visitors here may recall that the AP reporter referred to a key figure as “inventories” when it really represented “sales.” As a result, the typical reader of Crutsinger’s Friday AP dispatch could not have known that he was either ignorantly or deliberately covering up a serious 3.8 percent decline in year-over-year sales (6.8 percent before seasonal adjustment) — yet another in a string of such troubling monthly comparative decreases.

The bad news is that in covering the government’s manufacturing-related report today, Crutsinger failed to report yet another serious year-over-year sales decline in an economy which we’re supposed to believe is growing. Many readers will come away from Crutsinger’s coverage and its accompanying headline believing that things are really all right. They’re not.