Thursday, March 22, 2012
Claims Good, PMIs Bad
Claims first. Initial claims are stuck in a really tight range around 355K, which is very good. At this time of year a lot of seasonal adjustments kick in. They may be overstating seasonal claims a bit. I don't know. The four week moving average of continuing claims is going down, which is an excellent sign. It has taken a while to get here, but isn't this pretty?
Continuing claims are not so pretty, but at least they are moving in the right direction with some determination:
For quite a while these graphs were just too ugly to post, because unlike certain people who collect sad graphs to torture their tax preparers, I have some decency at heart. The thing about initials is that once they really drop decisively below 400K they tend to fall for quite some time.
For much of last year we were stuck just on the wrong side of things:
I really hated these graphs then. They would give me stomachaches.
Last one in this series is covered employment, of course:
This one is still rather depressing, but it lags quite a bit and should improve further in April, when the next update for covered employment is due.
Having written all that, these aren't really leading indicators. They are coincident or lagging. Therefore past performance is no guarantee of future results.
On the international side, Eurozone PMI does not deliver the same thrills, unless you are a masochist. And China's - well, well, well, it's the lead exhibit at the S&M convention. German manufacturing reported a drop in employment, although their PMIs are the best of the Euro lot by quite a bit. The German economy is still expanding a bit on services, but manufacturing contract. France stuck on services but manufacturing contracted. Euro cost pressures on manufacturers are building, whereas China seems to be either further along in the cycle or really enduring a steep decline in business activity. Employment in Chinese manufacturing is contracting.
Prospects for Europe turning in growth in Q1 are slim indeed. Germany's in a skipping recession, and it probably won't get worse than that, but Germans are no great consumers, and the Contract-O-Matic group (Portugal, Italy, Spain, Ireland, Greece, plus half the eastern bloc) will keep Europe on the low side.
Europe won't be helped by China's slowing growth, and China won't be helped by Europe's situation.
So although the US hardly looks halcyon, it doesn't look that bad in comparison. I am becoming more negative on China, because it has a lot of structural imploding to overcome, and the early moves have all been to avoid the impact rather than shield the impact. They have to meet this head on rather than try to roll the ball further. There's significant internal growth possibilities, but you can't really exploit them without shutting down some of the bad stuff.
To end on a brighter note, Japanese exports improved in February.
For quite a while these graphs were just too ugly to post, because unlike certain people who collect sad graphs to torture their tax preparers, I have some decency at heart.
Torture? What math person doesn't love colorful charts?
I paid quite a bit to have my taxes done. I consider the charts to be the tip!
One person's torture is simply another person's miserable experience. That's even more love. Everyone knows misery loves company, lol. Sigh.
And lastly, she did get her revenge. She handed me a bag with the name of her business on it. It's a nice one. I'll use it for groceries. How is this revenge? I drove all the way home knowing that as a taxpayer, I *am* the bagholder!
We are taking our medicine a little at a time so it
doesn't kill us. Unfortunately it may be the best of bad
options. A lower standard of living for most to protect
the financial system.
You may take heart in this: Whatever problems we've got now, we just have to get through them with civil society intact and achieve a sustainable level of debt (public and consumer). In the span of five to ten years, we're going to start to see amazing things happen technologically and there'll be lots of need for capital and lots of work to be done. Starting with energy, but probably including biotech and 3-D printing.
It's going to be great.
the financial system.
I read that as a lower standard of living for most to protect the standard of living for the elite. Which is exactly what it is.
Links to this post: