In response to GDPNow Rises to 0.3% Following Dismal Retail Sales and Inventory Reports; Fed vs. Fed Update I received a nice email from reader Tibor.
Tibor writes “Hey Mish, Just wanted to thank you for being one of the sanest, if not sanest, economic skeptics out there. Most of the pundits on the bear side would bark at the moon for a fortnight about how corrupt the Atlanta fed update was this morning. Sales down, but GDPNow ticks up?! Impossible! Scam! In contrast, you probably pegged the most reasonable explanation in the 4th sentence of your post. Thanks for not being the typical econ-conspiracy blogger spewing BS to placate the simpletons. I hope you get credit for your measured critiques.”
Thanks Tibor.
He was commenting on my thoughts: “I expected a dip to -0.3% because inventories and sales were both down. … We have seen these kinds of results before, so this is not shocking. Most likely, the numbers were factored into preliminary reports and today’s numbers were slightly better than expected.”
Let’s now take a look at a series of charts to see how dismal (or not) things are.
Total Business Sales
Manufacturers Sales
Retailer Sales
Merchant Wholesalers: Inventories to Sales Ratio
Total Business Sales Percent Change From Year Ago
Total Business Sales Detail
Possible Conclusions
- “Sufficient momentum for rate hikes as soon as April“
- It’s different this time!
- One and Two
- We are in recession
- Don’t worry, it’s the weather
Mike “Mish” Shedlock
Forgot #5: Central banks (governments) are buying stocks & bonds through proxies…
What about the weather Mish? I know I wasn’t mentioned but…..it’s just gotta be the weather too!
Damn – That’s a good one
A tip of the hat
Possibly your best post I’ve read.
A tip of the hat to Mattson01
I added possibility #5
Don’t worry, it’s the weather
The economy woke up with Janet Yellen, and rolled over.
.
Check out this ‘tax and spend’ Clinton interview:
” Clinton: Well, I have connected up my proposals for the kind of investments I want to make with the taxes that I think have to be raised. So on individual pieces of my agenda, I try to demonstrate clearly that I have a way for paying for paid family leave, for example, for debt-free tuition. So I would spend about $100 billion a year. And I think it’s affordable… ”
more at link
http://www.nydailynews.com/opinion/transcript-hillary-clinton-meets-news-editorial-board-article-1.2596292
.
Everybody needs a vacation every once in a while. While we are at it, let’s give welfare recipients some vacation pay too. Then everybody will be more equal.
Ironic post since you are a conspiracy theorist when it comes to the NY Fed model. I’m guessing simply because their higher numbers don’t fit with your constant recession call.
Atlanta Fed is currently predicting the lowest GDP of all mainstream sources, so clearly you can’t bash them as well.
Given the market’s reaction, another possibility is “Bad news is good news again”.
Who needs growth and real goods when you have derivatives and a printing press…
And: little chance of an interest rate hike, but maybe QE4 !
The 10+% dip to a seemingly lower plateau in sales to inventory between 2000 and 2005 is interesting. Anyone care to comment on that? is it shift to online? Much of what is drop shipped? Or perhaps “everything” being sourced from China now, so supply lines appear simpler from an American POV? EDI integration, at least for medium and up actors, was pretty much already completed by 1995. Ditto for the bulk of retailer/distributor consolidation..
At least part of the recent rebound, could be due to some unwinding of whatever caused the drop in the first place.
The charts show previous recessions were relatively sharp. The charts today show a rolling over, which indicates a much longer and deeper recession (or depression) is taking place.
When the economy generally sucks, you can always find some reason to believe a recession is imminent or already here. You’ve been finding those reasons for 5 or 6 years. http://globaleconomicanalysis.blogspot.com/2012/06/12-reasons-us-recession-has-arrived-or.html
How would we know when you are finally correct?
You can always find reasons to believe recession will never come even when we are in one.
I completely underestimated what QE would do – so did the ECRI
I have admitted as much
If you prefer, you can believe the Fed who was as much overoptimistic as I was pessimistic.
If you are looking for perfection, obviously you need to look in a mirror.
I would add that I am not certain how well we ever came out of this recession, with the employment numbers so misleading due to the many factors Mish has outlined.
Those factors are real, and the economy now at less then 6 percent unemployment, is far worse then at other times with the same number.
“If you are looking for perfection, obviously you need to look in a mirror”
Great line.
Jamie Diamond and his buddy Obama says the economy is fine, Mish says its entering recession. Who are you going to trust? My money is on Mish.
Mish,
I have been a loyal reader for years and congratulate you on the move to mishtalk.com as it provides a better user experience. We can see and most people I know feel the slowdown. We can see from data and know from history that the economy is weak and potentially recessionary. Markets are very expensive by virtually any measure used with historic relevance. But none of it is actionable as an investor due to Central Bank interference. SO I cannot bring myself to go long following the talking heads and I cannot risk going short for fear of continued central bank irrationality. So I sit on sidelines with my money earning little/nothing and fall further behind by the month.
Thanks
Van
Pingback: US Economy – Ongoing Distortions | Political American
Pingback: US Economy – Ongoing Distortions SNB&CHF Gold&FX
Pingback: Czy w USA rozpoczyna się recesja?