One month of data for the third quarter is in. The reports are mixed but the number of negative headlines exceeds the number of positive ones.
Let’s start with more numbers from today before finishing off with what we know so far.
The Census Bureau Report on Advance Economic Indicators shows wholesale inventories rose 0.4% in July.
Retail inventories fell by 0.2% from an unrevised June estimate. The Census Bureau revised wholesale inventories slightly lower from 0.7% to 0.6%.
Wholesale inventories gave a late upward boost to second quarter GDP.
Average this out and you have a 0.1% rise in both wholesale and retail inventories or 0.2% in one and nothing in the other.
This is a slight positive to third quarter GDP, subject to revisions, and further subject to Hurricane Harvey disruptions.
Slow Start to Third Quarter
So far, the third quarter is not off to a great start.
The housing reports were worse than expected, today’s reports on international trade and inventories will not impact GDP much, the durable goods report was mixed despite a miserable headline number, and industrial production was weak.
- August 28: Trade Deficit Increases Slightly
- August 25: Durable Goods Orders Decline 6.8% Led by Aircraft
- August 24: Existing Home Sales Unexpectedly Decline to 2017 Lows
- August 23: New Home Sales Plunge to Lowest Annualized Pace in Three Years
- August 20: Deep Subprime Auto Loan Delinquencies Reach 2007 Levels: The Next Big Short?
- August 17: Unexpectedly Weak Industrial Production Report Released Unexpectedly Early
- August 16: Housing Starts Unexpectedly Sink, Multi-Family in Huge 34% Retreat Year-Over-Year
- August 15: Retail Sales Bounce: Upward Revisions Explain Strength in 2nd Quarter GDP
- August 15: Serious Credit Card Delinquencies Rise for the Third Straight Quarter: Trend Not Seen Since 2009
- August 14: Consumer Spending Expectations Down Again: Dear Fed, Why Don’t You Believe Your Own Survey?
- August 11: CPI Weak, Prices of Autos, Lodging Away From Home Drop: Econoday Cheers Rising Medical and Apparel Prices
Retail spending rose sharply in July, assuming one actually believes the August 15 Census Bureau report on retail spending that shows auto sales rose 1.2%. I don’t.
Cracks such as rising credit card delinquencies and more believable report on slowing auto sales have popped up.
Finally, Trump’s increasingly belligerent position on trade is very worrying. For details, please see Trump Rant of the Day: “I want tariffs. Bring me some tariffs!”
Mike “Mish” Shedlock
(Waves hand…) Nothing that a little central bank magic can’t fix…..
“Cracks such as rising credit card delinquencies and more believable report on slowing auto sales have popped up.”
…
Subprime credit canary: cough cough
Nothing to see … move along …
…
In Q1 2017, subprime personal loan originations declined 10.6% year-over-year, compared to a positive annual growth rate of 11.0% in Q1 2016. This marks three straight quarters of year-over-year declines in originations.
In the credit card market, subprime originations declined by 1.8% to start 2017, the second consecutive quarter of decline
Auto loan originations declined 8.9% year-over-year from Q1 2016 to Q1 2017. Originations to subprime consumers dropped to 1.10 million in Q1 2017, down from 1.20 million in the first quarter of 2016.
http://newsroom.transunion.com/start-of-a-new-trend-pullback-in-subprime-loans-observed/
“Retail inventories fell by 0.2% from an unrevised June estimate.”
…
July? Yeah, well …,
WASHINGTON – Boosted by continuing sales growth, August is expected to be the busiest month on record for imports at the nation’s major retail container ports and 2017 is on track to set a new annual high, according to the monthly Global Port Tracker report released today by the National Retail Federation and Hackett Associates.
….
August is forecast at 1.75 million TEU, up 2.1 percent from last year. That would be the highest monthly volume recorded since NRF began tracking imports in 2000, topping the 1.73 million TEU seen in March 2015. The 1.7 million-plus numbers seen in May and July and now expected for August and October would represent four of the six busiest months in the report’s history.
https://nrf.com/media/press-releases/imports-set-hit-new-monthly-and-annual-records-retail-sales-continue-increase
On a personal note, Eddie Bauer has been desperately trying to get my online business. Last ordered maybe 6 months ago. A month ago 30% off of clearance. Then moved to 40% off of clearance. Still I did not budge. Last week 50% off of clearance + $10 gift card. No thanks.
u nailed it mish, CC/auto loan defaults shattering all kinds of records which means moar bank bailouts and with the economy scraping the bottom for 9 straight years record shattering deficits.2 trillion in annual deficits in 2018 and wait for it……3tril plus by 2020.yellen will no choice but to run the presses till they explode
+ .0001 at the very least?
Reblogged this on World4Justice : NOW! Lobby Forum..
This says more about the organic food swindle than it does about overall inflation.
Organic food and its prices were just stupid.