Recession Watch: the party isn't over yet!!

[Cutlass]

Little states too. Connecticut hasn't finalized a budget yet, and revenue projections are not firmed up.

 

[Rashiminos]

Last time I checked, my state had trimmed 800+ million from its budget.

 

[Cutlass]

What state is that?

 

[Rashiminos]

Maryland.

 

[PiMan]

http://www.theage.com.au/national/seven-rate-rises-in-a-row-tipped-20091015-gz64.html

Seven rate rises in a row tipped
TIM COLEBATCH
October 16, 2009

A declaration by Reserve Bank chief Glenn Stevens that the bank would not be ''timid'' about raising interest rates has led financial markets to tip seven interest rate rises in a row, while the dollar has surged to 92.23 US cents.

In an unexpectedly hawkish speech in Perth, Mr Stevens fuelled speculation that last week's interest rate rise would be just one of a series, as the Reserve rapidly unwinds the interest rate cuts delivered late last year to shield borrowers from the global financial crisis.

Mr Stevens said interest rates had to be adjusted towards more normal levels as the economy recovered. He described last week's rise as ''a step in that direction'', and made it clear the Reserve would not be ''too timid to lessen that stimulus in a timely way''.

''The need for such an expansionary setting of policy has passed,'' he said. ''It is sensible and prudent to begin to remove it, and increasingly imprudent not to do so.

''The very low interest rate settings were designed for a weaker economy than we are, in fact, facing. That is not a problem. That is a very desirable situation. It is a welcome contrast to the experience of other countries.

''The period of greatest weakness in the Australian economy has probably passed. Barring another serious international setback, the economy is likely to continue on a path of gradual expansion during 2010.''

Financial markets responded by pricing in the most rapid series of interest rate rises Australia has seen for 15 years. Markets now predict that the Reserve board will raise rates at seven consecutive meetings, lifting its cash rate from 3 per cent 10 days ago to 4.75 per cent by May and 5 per cent by July.

Such an escalation would raise the cost of servicing a typical $275,000 mortgage by $335 a month from the levels applying at the start of last week.

The currency markets also seized on the Reserve Bank governor's comments to drive up the Australian dollar by 0.75 US cents in an afternoon, as it continues to hurtle towards parity with the US dollar - or, potentially, beyond it.

Mr Stevens dismissed a question on the risks created by the currency's surge. ''We've got one of the best-performing economies in the world,'' he said. ''People here are confident about the future, and foreigners are confident about our future. It's not surprising that they're interested in our currency, given the condition of some other countries.''

Opposition housing spokesman Scott Morrison endorsed Mr Stevens' view that the threat has passed, and called on the Government to wind back its ''reckless and wasteful stimulus spending'' or force the Reserve to raise rates even higher. But Treasurer Wayne Swan said the stimulus was being gradually withdrawn, as intended.

?The Bureau of Statistics reports that Melbourne and Hobart now share the lowest unemployment rate of any state capital, with 5.5 per cent of their workforce jobless in September.

Canberra has easily the lowest unemployment rate of the main cities at 3.4 per cent, while the Gold Coast has the highest at 6.4 per cent.

This will increase the gap in interest rates between Australia and most other countries from more than 2.5% last month to up to 5% by mid next year. This will likely leave the Australian dollar closer in value to the Euro than the US dollar (which in theory means cheaper imported goods, but might just mean bigger profits).

 

[Integral]

Economic indicators for the first half of October

BLS - CPI, September 2009

Consumer Price Index - September 2009

On a seasonally adjusted basis, the Consumer Price Index for All
Urban Consumers (CPI-U) rose 0.2 percent in September, the Bureau of
Labor Statistics reported today. The increase was less than the 0.4
percent rise in August. The index has decreased 1.3 percent over the
last 12 months on a not seasonally adjusted basis.

The seasonally adjusted increase in the all items index was broad
based, although tempered by a decline in the food index. The all
items less food and energy index increased 0.2 percent in September
after increasing 0.1 percent in each of the previous two months.
Contributing to this increase were advances in the indexes for
lodging away from home, medical care, new vehicles, used cars and
trucks, and public transportation. The increase occurred despite
declines in the indexes for rent and owners' equivalent rent, the
first decreases in those indexes since 1992. The energy index also
increased in September, as increases in the indexes for gasoline,
fuel oil and electricity more than offset a decline in the index for
natural gas.

Where's my hyperinflation?

--

New York Manufacturing Survey, October 2009 -

The Empire State Manufacturing Survey indicates that conditions for New York manufacturers improved significantly in October. The general business conditions index climbed 16 points to 34.6, its highest level in five years. The new orders index rose 11 points, and the shipments index shot up 30 points, to 35.1. Both employment indexes were positive for the first time in more than a year. Price indexes were little changed, with the prices paid index remaining positive while the prices received index hovered just below zero. Future indexes advanced to relatively high levels, indicating that respondents expect conditions to improve further in the months ahead.

In response to a series of supplementary questions on credit issues, manufacturers reported that credit conditions have tightened over the past year while firms’ borrowing needs have eased (see Supplemental Report tab). Over the past three months, however, there appears to have been little change in borrowing needs and only a modest decline in credit availability, on net. The survey also points to increased borrowing costs over the past three months, but little change in credit limits (ceilings). These findings are fairly close to those obtained in March, when these questions were previously asked.

New York's pulling out of recession. Business conditions are improving markedly in manufacturing (that is, outside of financials) and the employment indicies are up. Expectations continue improve.

--

Fed: Industrial Capacity Utilization for September 2009 -

Industrial production rose 0.7 percent in September after an upwardly revised gain of 1.2 percent in August. For the third quarter as a whole, output advanced at an annual rate of 5.2 percent, the first quarterly gain since the first quarter of 2008 and the largest gain since the first quarter of 2005. Production in manufacturing increased 0.9 percent in September, and the index excluding motor vehicles and parts rose 0.5 percent. Mining output strengthened 0.7 percent, while the output of utilities fell 0.7 percent. At 98.5 percent of its 2002 average, total industrial production was 6.1 percent below its level of a year earlier. In September, the capacity utilization rate for total industry increased to 70.5 percent, a level 10.4 percentage points below its average for 1972 through 2008.

Cap utilization is rising, but still far below trend.

--

Philly Fed survey for October 2009 -

Spoiler :

October 2009 Business Outlook Survey
Survey Press Conference

Listen to the press conference for this month's survey. Audio Interview

The region's manufacturing sector is continuing to show signs of recovery, according to firms polled for this month's Business Outlook Survey. Indexes for general activity, new orders, and shipments all registered positive readings for the third consecutive month, but they suggest only marginal growth. Indexes for employment and work hours remained negative, but trends suggest that employment losses have moderated in recent months. A growing percentage of firms have indicated higher input prices in recent months, but price increases for their own manufactured goods are not prevalent. The region's manufacturing executives expect business activity to increase over the next six months; however, expectations have moderated somewhat in the last several months.

Indicators Still Suggest Only Modest Growth

The survey's broadest measure of manufacturing conditions, the diffusion index of current activity, fell from a reading of 14.1 in September to 11.5 this month. The index has now remained positive for three consecutive months following a nearly continuous string of negative readings since the beginning of the recession in December 2007 (see Chart). The percentage of firms reporting increases in activity this month (28 percent) exceeded the percentage reporting decreases (17 percent). Other broad indicators suggest some growth this month. The current new orders index also remained positive for the third consecutive month and increased three points. The current shipments index decreased five points but remained slightly positive. Firms reported declines in inventories this month: The current inventory index declined 14 points, from -18.1 in September to -31.8 this month. Indicators for unfilled orders and delivery times remained negative, suggesting continued weakness.

Labor market conditions remain weak, although there are signs that widespread declines have moderated considerably. The current employment index, although still negative, increased eight points, from -14.3 to -6.8, its highest reading since September 2008. Twenty-three percent of firms reported employment declines, while 16 percent reported employment increases. The workweek index remained negative, edging one point lower, to -4.7.

Cost Pressures on the Rise

Although more firms have reported higher prices for purchased inputs over the past few months, firms continued reporting overall declines in prices of their manufactured goods this month. The prices paid index has been indicating higher input prices for the past three months, increasing 25 points since July. The same manufacturers, however, reported declines in prices for their own manufactured goods for the12th consecutive month. The prices received index, however, increased six points, to -4.3.

Manufacturers Are Still Optimistic

The future general activity index remained positive for the 10th consecutive month but decreased from 47. 8 in September to 39.8, its lowest reading since April (see Chart). Despite losing ground in recent months, indicators of future activity remain near levels not seen since 2004. Indexes for future new orders and shipments declined this month, falling 10 points and 17 points, respectively. For the sixth consecutive month, the percentage of firms expecting employment to increase over the next six months exceeded the percentage expecting declines (26 percent versus 19 percent). But just as the other broad future indicators have fallen, the future employment index fell 13 points.

In special questions this month firms were asked about their plans for capital spending over the next six to 12 months. Over 35 percent of the firms indicated that they had revised their planned spending downward due to changing financial conditions; 14 percent indicated they had revised plans upward. The percentage of firms expecting to decrease their capital spending over the next six to 12 months narrowly exceeded the percentage expecting to increase spending. The most frequently cited reason for not increasing capital spending was low expected sales growth, a low rate of current capital utilization, and limited need to replace information technology equipment.

Summary

According to respondents to the October Business Outlook Survey, manufacturing conditions are improving marginally. For the third consecutive month, the survey's indicators for general activity, new orders, and shipments were positive, suggesting some positive growth. Employment continued to decline among the reporting firms, although the pace of decline was slower. Firms still expect conditions to improve over the next six months, but future indicators suggest that optimism has waned somewhat in recent months.

It's a long article so I've put it in spoilers, but the short story is that business conditions are improving a bit, but price pressures are rising and employment continues to decline. All standard fare for an economy climbing out of recession...

 

[civ_king]

Economic indicators for the first half of October

BLS - CPI, September 2009


Where's my hyperinflation?

--

New York Manufacturing Survey, October 2009 -


New York's pulling out of recession. Business conditions are improving markedly in manufacturing (that is, outside of financials) and the employment indicies are up. Expectations continue improve.

--

Fed: Industrial Capacity Utilization for September 2009 -


Cap utilization is rising, but still far below trend.

--

Philly Fed survey for October 2009 -

Spoiler :

October 2009 Business Outlook Survey
Survey Press Conference

Listen to the press conference for this month's survey. Audio Interview

The region's manufacturing sector is continuing to show signs of recovery, according to firms polled for this month's Business Outlook Survey. Indexes for general activity, new orders, and shipments all registered positive readings for the third consecutive month, but they suggest only marginal growth. Indexes for employment and work hours remained negative, but trends suggest that employment losses have moderated in recent months. A growing percentage of firms have indicated higher input prices in recent months, but price increases for their own manufactured goods are not prevalent. The region's manufacturing executives expect business activity to increase over the next six months; however, expectations have moderated somewhat in the last several months.

Indicators Still Suggest Only Modest Growth

The survey's broadest measure of manufacturing conditions, the diffusion index of current activity, fell from a reading of 14.1 in September to 11.5 this month. The index has now remained positive for three consecutive months following a nearly continuous string of negative readings since the beginning of the recession in December 2007 (see Chart). The percentage of firms reporting increases in activity this month (28 percent) exceeded the percentage reporting decreases (17 percent). Other broad indicators suggest some growth this month. The current new orders index also remained positive for the third consecutive month and increased three points. The current shipments index decreased five points but remained slightly positive. Firms reported declines in inventories this month: The current inventory index declined 14 points, from -18.1 in September to -31.8 this month. Indicators for unfilled orders and delivery times remained negative, suggesting continued weakness.

Labor market conditions remain weak, although there are signs that widespread declines have moderated considerably. The current employment index, although still negative, increased eight points, from -14.3 to -6.8, its highest reading since September 2008. Twenty-three percent of firms reported employment declines, while 16 percent reported employment increases. The workweek index remained negative, edging one point lower, to -4.7.

Cost Pressures on the Rise

Although more firms have reported higher prices for purchased inputs over the past few months, firms continued reporting overall declines in prices of their manufactured goods this month. The prices paid index has been indicating higher input prices for the past three months, increasing 25 points since July. The same manufacturers, however, reported declines in prices for their own manufactured goods for the12th consecutive month. The prices received index, however, increased six points, to -4.3.

Manufacturers Are Still Optimistic

The future general activity index remained positive for the 10th consecutive month but decreased from 47. 8 in September to 39.8, its lowest reading since April (see Chart). Despite losing ground in recent months, indicators of future activity remain near levels not seen since 2004. Indexes for future new orders and shipments declined this month, falling 10 points and 17 points, respectively. For the sixth consecutive month, the percentage of firms expecting employment to increase over the next six months exceeded the percentage expecting declines (26 percent versus 19 percent). But just as the other broad future indicators have fallen, the future employment index fell 13 points.

In special questions this month firms were asked about their plans for capital spending over the next six to 12 months. Over 35 percent of the firms indicated that they had revised their planned spending downward due to changing financial conditions; 14 percent indicated they had revised plans upward. The percentage of firms expecting to decrease their capital spending over the next six to 12 months narrowly exceeded the percentage expecting to increase spending. The most frequently cited reason for not increasing capital spending was low expected sales growth, a low rate of current capital utilization, and limited need to replace information technology equipment.

Summary

According to respondents to the October Business Outlook Survey, manufacturing conditions are improving marginally. For the third consecutive month, the survey's indicators for general activity, new orders, and shipments were positive, suggesting some positive growth. Employment continued to decline among the reporting firms, although the pace of decline was slower. Firms still expect conditions to improve over the next six months, but future indicators suggest that optimism has waned somewhat in recent months.

It's a long article so I've put it in spoilers, but the short story is that business conditions are improving a bit, but price pressures are rising and employment continues to decline. All standard fare for an economy climbing out of recession...

new US currency

 

[Rashiminos]

Where's my hyperinflation?

Coming down the pipe.

 

[civ_king]

We (US) are going to get burned by the gold-standard mentality

 

[Merkinball]

Where's my hyperinflation? - Integral

Zombified banks and a paucity of available credit.

 

[Whomp]

Coming down the pipe.

When? Because there's nothing I see that shows pricing power.
Labor? Nope. Credit? Nope. Capacity utilization? Nope. Velocity? Nope. Book sales? Nope, in fact a book publisher suggested yesterday that we put a law in place to avoid the price wars between Amazon and Wal_Mart. Pet food? OK...

Zombified banks and a paucity of available credit.

That's an oxymoron.

 

[Rashiminos]

"Quantitative Easing" along with some check-kiting between the Treasury and the Fed.

 

[Whomp]

"Quantitative Easing."

Followed by quantitative tightening but the other issues would have to become a factor first. They're already testing reverse repos and most banks are not extending their increased FDIC guarantees.

 

[Snorrius]

Moody's warns USA about its AAA rating can be downgraded.

"The Aaa rating of the U.S. is not guaranteed," said Steven Hess, Moody's lead analyst for the United States said in an interview with Reuters Television. "So if they don't get the deficit down in the next 3-4 years to a sustainable level, then the rating will be in jeopardy."

Seems like Moody's tries to secure its reputation - everyone knows USA will have to either default or hyperinflate soon.

 

[RedRalph]

Brits are still in recession (apparently this comes as a big shock)

 

[Munch]

Brits are still in recession (apparently this comes as a big shock)

One of the headlines on the BBC news site when I had breakfast, behind the story about the BNP on Question Time, was that 'data released today is expected to show UK economic growth, say experts'.

When I got to work, the headline, overtaking the story about the BNP, was 'the UK economy unexpectedly shrank'.

 

[yesboii]

This data has already been put in graph form for you:

Sigh. Good ol' Laffable curve. Screw Bush for ruining my fantasy.

 

[Merkinball]

Brits are still in recession (apparently this comes as a big shock)

That's okay. Americans are still in denial.

 

[Cutlass]

Sigh. Good ol' Laffable curve. Screw Bush for ruining my fantasy.

The fantasy was ruined 20 years earlier.

 

[Merkinball]

http://www.zerohedge.com/article/how-federal-reserve-bailed-out-world