Succinct summation of week’s events:


1) Payrolls in Feb and March are revised higher, led by the private sector and offsets April weakness. Avg duration of unemployment while still high, falls to 1 yr low.
2) Initial Jobless Claims end 3 week run above 380k and total 14k less than expected at 365k.
3) ISM mfr’g surprises to upside, especially in light of regional weakness, at 54.8 vs 53.4 in Mar and est of 53. Best since June ’11.
4) Vehicle sales hang in above 14mm for 4th straight month.
5) Q1 Home Ownership rate falls to 65.4%, back to the 57 year average, things normalizing, renting helps create more dynamic, mobile, flexible economy.
6) RBAustralia cuts rates an unexpected 50bps. Having conducted one of the most stable monetary policies (kept rates above rate of inflation) over the past 30 yrs, they have room to maneuver.
7) Spanish and Italian bond yields fall.


1) April Payrolls rise only 115k, 130k of which from the private sector. Participation rate falls to lowest since 1981, household survey declines as does size of labor force, avg hourly earnings flat m/o/m and up just 1.8% y/o/y, still below the rate of inflation.
2) ISM services in April falls to lowest since Dec at 53.5 vs 56 in March.
3) Retail comps in April miss expectations (weather give back?) .
4) Spain’s economy as expected officially back in recession.
5) German unemployment unexpectedly rises in April.
6) Euro zone mfr’g and services composite index revised to 6 month low.
7) UK mfr’g and services indices also fall to multi month low.
8) Euro zone CPI up 2.6% y/o/y vs 2.7% in March, above estimate of 2.5% and higher than 2% ECB target rate for 17 straight mo’s.
9) Spanish and Italian stocks trade lower again.
10) China’s PMI services index falls to 3 month low and while mfr’g PMI up at best since Mar ’11, was slightly softer than expected.

Category: Markets

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

11 Responses to “Succinct Summation of Week’s Events (May, 4 2012)”

  1. techy says:

    below is the key to EURO problems, as long as germans are not affected they will keeping euro towards death, but if it starts to hurt them then they will let some nice money printing fight the deflation indcued by debt overhang.

    5) German unemployment unexpectedly rises in April.

  2. constantnormal says:

    “Spain’s economy as expected officially back in recession.”

    … this only goes to punctuate the nonsensical definition of “recession” that is used by economists. Looking at the Spanish employment history, it’s level of economic vitality has been near-dead (at least for a wannabe developed nation), when compared to that of the moribund EU as a whole …!ctype=l&strail=false&bcs=d&nselm=h&met_y=unemployment_rate&fdim_y=seasonality:sa&scale_y=lin&ind_y=false&rdim=country_group&idim=country:es&idim=country_group:eu&ifdim=country_group&hl=en_US&dl=en&ind=false

    Clearly, a very sick national economy, unable to expand their demand for labor since May 2007 — well before the EU turned visibly ill or the rest of the globe. And it did NOT participate in the tiny improvement seen by the EU as a whole between Fed 2010 and Mar 2011 …

    I know that employment is not everything, but when it is looking this bad for this long, it is clear that the national economy is very, very sick, without any hint of respite from recession.

  3. GeorgeBurnsWasRight says:

    I note that 5 of the 7 positives were domestic, but only 3 of the ten negatives were.

    But most people think the condition of the US economy is determined mostly or entirely by whoever is President.

  4. techy says:

    Question to the bulls: after today’s drop what are the odds that this thing turns into something big?

    My bet is that due to the election current administration may not want it that way unless it can be pinned on to repubs. But what can they do to calm the markets?(how about tax releif for overseas profits?)

    Can the FED do anything, maybe QE3?

    To me Europe is a big issue since they refuse to co-operate with each other. India seems to be unravelling.
    Oh cr@p, I think I am leaning bearish :)

  5. b_thunder says:

    I disagree with the “positive” #6 – RBAustralia cuts rates an unexpected 50bps.
    They must have a damn good reason to cut. To me this seems very similar to Fed rate cuts in early 2008. That wasn’t a “positive”, that was trying and failing to get in front of the Big Slowdown

  6. junkndump says:

    “Spain never left recession” and other U.S. “recession” comments from ECRI’s Achuthan in a MSSB Q&A just posted

  7. machinehead says:

    @ b_thunder – among its rationales for the half-point rate cut, the RBA mentioned stagnant housing prices.

    As the U.S. Federal Reserve has learned to its sorrow, even cutting the policy rate to zero won’t bring back a housing bubble once it’s popped.

    Nor, in Australia’s case, will it support A$2 million bungalows on Bondi Beach.

    As Alfred E. Newman used to say — “What, no worries?

  8. machinehead,

    you may be ‘Quoting’ the Ozzie-variant..

    though, from what I remember, below, is good Snapshot of ‘Things A.E.’..

    Alfred E. Newman, a make believe cartoon character invented to say funny things and make us laugh. Here are a few of his quotes;

    Crime does not pay … as well as politics.
    Alfred E. Newman

    We are living in a world today
    where lemonade is made from
    artificial flavoring and furniture polish
    is made from real lemons…
    Alfred E Newman

    What, Me worry?
    Alfred E Newman

    America; first we fight for our freedom,
    then we make laws to take it away.
    Alfred E Newman

    Most people don’t act stupid:
    it’s the real thing!
    Alfred E Newman

    The reason many people are lost in thought
    is because its unfamiliar territory!
    Alfred E Newman

    How come we choose from just 2 people
    for president and 50 for Miss America?
    Alfred E Newman

    Who says nothing is impossible?
    Some people do it every day!
    Alfred E Newman

  9. Adding in this week’s forward-looking data, TRI gauges Q2 GDP to have an upper bound of 3.2%. Eleven days prior to the Election, BEA will announce Q3 GDP of not more than 3.6%. Four days prior, BLS will announce a 7.7% Unemployment Rate. FOMC will announce first rate increase in 2013Q3 upon UR attaining 7% … ignore the “late 2014″ charade.

    TRI charts:

  10. josap says:

    BLS will announce a 7.7% Unemployment Rate.

    Only after many more unemployed people drop out off the counted rolls and become a negitive to the labor population ratio. Or none of the young people just out of school find a job and therefore are not counted.

  11. Molesworth says:

    Freddy Hutter,
    Don’t know if the link is to your website or someone else’s.
    If it is yours…dude, you may have something useful to say, but it’s impossible to see.
    That is one ugly, jumbled website.