5/29/15 The Chicago Business Barometer Fell
Back into contraction in May,
The Chicago Business Barometer fell sharply back into contraction in May, reversing all of April’s gain and casting doubt on the strength of the widely expected bounce back in the US economy in the second quarter. The Barometer fell 6.1 points to 46.2 in May from 52.3 in April. All five components of the Barometer weakened with three dropping by more than 10% and all of them below the 50 breakeven mark.
April’s positive move had suggested that the first quarter slowdown was transitory and had been impacted by the cold snap and port strikes. May’s weakness points to a more fundamental slowdown with the Barometer running only slightly above February’s 5 ½ year low of 45.8.”
5/29/15: Bureau of Economic Analysis (BEA)
Second estimate of first 2015 quarter GDP:
- Real gross domestic product-the value of the production of goods and services in the US, adjusted for price changes-decreased at an annual rate of 0.7 percent in the first quarter of 2015, according to the “second” estimate released by the BEA. In the fourth quarter real GDP increased 2.2 percent.
- The GDP estimate released today is based on more complete source data than previously available. In the advance estimate, real GDP increased 0.2 percent. This revision, which was near economists’ latest estimate of a 1% contraction, showed how the world’s largest economy remains vulnerable to shocks as it struggles to regain its vigor.
5/26/15: US Department of Commerce
The Advance Report on Durable goods Manufacturers’ Shipments, Inventories and Orders (April2015):
- New Orders for manufactured durable goods in April decreased 0.5 percent. This decrease, down two of the last three months, followed a 5.1 percent March increase.
- Shipments of manufactured durable goods in April, down three of the last four months, decreased 0.1 percent. This followed a 1.5 percent March increase. Primary metals, down six of the last seven months, drove the decrease of 2.1 percent.
- Unfilled orders for manufactured durable goods in April, down four of the last five months were virtually unchanged from March, which showed a 0.1 percent increase.
- Inventories of manufactured durable goods in April, up twenty four of the last twenty five months, increased 0.2 percent.
The Federal Reserve Bank of Richmond
Its survey of manufacturing activity for the Fifth District:
Manufacturing activity flattened in May according to the most recent survey by the Fed. Shipments and the volume of new orders leveled off while the backlog of orders declined further, compared to last month. Despite the soft conditions this month, manufacturers continued to look for improved business conditions in the next six months.”
The Federal Reserve Bank of Dallas
Its Texas Manufacturing Outlook Survey:
Texas factory activity declined again in May according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, fell to -13.5, its lowest reading in six years.”
Perceptions of broader business conditions worsened further this month…however, expectations regarding future business conditions improved in May.”
The Conference Board Consumer Confidence Index
declined in April, increased moderately in May”
The monthly Consumer Confidence Survey, based on a probability design random sample, is conducted by the Conference Board by Nielsen, a leading global provider of information and analytics around what consumers buy and watch….
Consumer Confidence improved modestly in May after declining sharply in April”
Lynn Franco, Director of Economic Indicators at the Conference Board.
US raw steel production
US raw steel production rose1.6 percent last week as mills operated at an ACUR of 73.3 percent. In the corresponding week last year mills operated at an ACUR of 77.3. On the year, mills have operated at an ACUR of 72.3 percent down from 77 percent in the like period last year. ~AISI
Alan Beaulieu: CBSA Conference Excerpts
Following are excerpts from remarks made by Alan Beaulieu, chief economist for ITR Economics at last month’s CBSA (Copper & Brass) annual conference, condensed by Tim Triplett, Editor of Metal Center News (in the current issue) and further condensed by me…for you:
While it’s true the US economy is slowing, conditions are better than most people think. We can look forward to another few years of prosperity before the next recession hits in 2018-2019…the current rates of growth for US GDP and industrial production are moderating, but that’s no reason for panic. The US economy is the world’s strongest…it’s normal for us to slowdown. Business should accelerate in 2016, and not just in the US. There are signs the recovery in the European Union is finally gaining some traction. Commodity prices should increase in 2016…The effects of the oil boom on the US economy cannot be overstated, the economist said. Cheap energy will lure companies from all over the globe and give the US economy strength for decades to come. Oil is hugely powerful for the United States. Higher interest rates will eventually have an effect on consumer spending and (ITR predicts) will lead to the next recession. In the meantime, capitalize on the low rates to borrow as much as you can. Acquire the real estate, machinery and talent you need to take full advantage of the demand that’s coming. The leading indicators are pointing up. Manufacturing is strong. Employment is rising now that companies have right-sized. Banks are lending. Consumers are spending. Non-residential construction is improving.”
There you have it…and this picture is consistent with predictions made by economists at the MSCI economic summit a couple years back. Now, if we can elect a pro-growth, lower taxes, less regulation president next November…
A federal grand jury has indicted former House Speaker Dennis Hastert on charges related to bank withdrawals of large sums of money that he allegedly paid to keep someone quiet about “past misconduct.” Mr. Hastert is charged with evading anti-money-laundering rules-specifically, with intentionally withdrawing hundreds of thousands of dollars in cash increments of less than $10,000 to avoid reporting requirements. He is also charged with lying to the FBI about the withdrawals.
The “misconduct” he was trying to conceal has not been described. Hastert withdrew around $1.7 million in cash from various bank accounts from 2010 to 2014. He allegedly agreed to pay $3.5 million to a person who has not been identified, but never paid the full amount (I suspect the recipient of the $1.7 million ratted on Hastert for not paying the full amount-just my assumption).
Talk about corruption in Washington: Hastert was a high school teacher and a coach from 1965-1981 in a suburb west of Chicago. Where and how in the hell did he get all that cash (it did not come in a legal and forthright manner, I can tell you that)? And he is a Republican. Everything he has should be taken from him. Piece of shit that he is (right along with the rest of the politicians)
Have a great weekend…. God bless America!
Buy American made products whenever you can, it’s good for you, good for your friends and neighbors and good for our country.
If you are hiring…try to hire a veteran…. they are loyal, disciplined, hardworking…and they deserve our support.
Remember these tidbits as the election cycle grinds on:
- Fast & Furious-Americans killed by guns supplied to the drug cartels…by the Department of Justice-Eric Holder presiding. The president was clueless. No one held accountable
- Benghazi: Four Americans killed in an assault described as the result of a viral video. This was proved to be a false narrative. This was in fact, a planned act of terror. The president was clueless. No one even knows where he was as this went down. No one held accountable
- “At this point, what difference does it make?” Hillary Clinton as Secretary of State
- The IRS targeting of conservative groups and individuals. No one held accountable, Lois Lerner is on paid vacation and has refused to testify. The president was clueless. No one held accountable
- Hillary using a private server for correspondence during her term as Secretary of State against the orders of the president. She thought “it would be more convenient…” Though the records were due when she left office, they were not submitted, subpoenas were issued, which she ignored for two years. Finally, she released 30,000 of some 60,000 alleged emails then she deleted the rest of the emails and will NOT turn over the server for investigation.