turned in an "unexpected" 5 point drop to 60.6 from an initial July number of 65.9. Consumers expected inflation to be at 5.9%, which may account for much of their bad mood.
Dallas Fed survey
was surprisingly negative. Unfilled orders contracted (-9.2), shipments contracted slightly (-2.3), but inventories rose (materials +8.9, finished +6.7). This survey didn't bother me last month because inventories shrank, but now it looks quite pessimistic. Hours worked went marginally negative. Prices received dropped 1.6 - prices paid for raw materials increased 10.9. What a beautiful picture!
s bad also. Richmond is now bleeding through into jobs and the workweek (-11) is not encouraging either. New orders at -20 and backlogs at -25 reiterate last month's weakness. Finished goods inventories +18; raw materials inventories +24. Can't look for a turnaround next month, can we? This despite a capacity utilization drop of 16 in July and another 9 in August.
If the Fed is going to act in September, wouldn't reports like this force its hand? What exactly is improving? We can hope that Kansas and Chicago PMI look okay, but that still would leave the midwest hanging out there hauling the whole wagon with a lot of dispirited consumers in the wagon.
On the other hand, launching another QE should shoot commodities prices up, and it is hard to see that really helping the situation.
For context on consumer confidence, I recommend this excellent post with graphs
by Doug Short and Steven Hansen. at Econintersect
. In particular, read to the bottom and look at the NFIB correlation series in recent history.
PS: One reason for my own dysphoria is that last year we had a very big cash build in other deposits, which supported the season of Bling. This year, no: