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Possible bottom and now moving higher:This month’s negative reading doesn’t look so bad because the revised last month’s down so much…;) Philadelphia Fed Business Outlook SurveyHighlightsThe factory sector continues to slow this month though, in good news, the rate of contraction is flattening out. The Philly Fed’s general business conditions index for January is minus 3.5, a little better than the Econoday consensus for minus 4.0 and the best reading since all the back in August. The new...

January 14th, 2016 Figure 1 source: @SoberLook @SoberLook yesterday shared this chart of collapsing UK inflation expectations from Barclays Research UK, heightening fears of a deflationary spiral. As noted in an earlier blog, the year 2015 began with the Chancellor, George Osborne ‘welcoming’ the news that inflation had fallen in December to 0.5% – more than 1% below the official target. The FT declared that “this is almost certainly “good deflation”.   Jittery stock markets are now...

This time the warm weather is cited for the weakness as utility spending fell. Yes, capitalism is about sales, and unspent income reduces sales, unless other agents spend more than their income, etc. etc. And with the private sector in general necessarily pro cyclical, unspent income stories beg fiscal adjustments, which at the moment are universally out of style. U.K. Industrial Output Plunges Most in Almost Three Years By Jill WardJan 12 (Bloomberg) — UK industrial production fell the...

A bit of growth in the EU supported by the low euro from the CB euro selling and consequent trade/current account surplus. However, without ECB euro selling the fundamentals will inevitably firm the euro until that growth component ceases. But meanwhile, watch for signs of ECB hawkishness: Ever so slowly, the euro zone economy awakes By Jeremy GauntJan 10 (Reuters) — Economic growth was running at an annual rate of 1.6 percent in the third quarter, roughly twice the average annual growth...

The Saudis post prices and let their clients buy all they want at the posted prices. So their policy has been to discount the price of their oil vs benchmarks until their sales increase to meet their production capacity, which is reportedly 12 million bpd. That means the price goes low enough to cause other suppliers to cut back, such as US shale producers, which translates into higher Saudi sales and output. Or demand has to increase. Seems they haven’t made much progress so far, as the...

Way below consensus and way bad: Chicago PMIThe Chicago Business Barometer contracted at the fastest pace since July 2009, falling 5.8 points to 42.9 in December from 48.7 in NovemberThere was also ongoing weakness in New Orders, which contracted at a faster pace, to the lowest level since May 2009. The fall in Production was more moderate but still put it back into contraction for the sixth time this year. The Employment component, which had recovered in recent months, dropped back below...

Another bad one: Pending Home Sales IndexHighlightsPending home sales in November declined for the third time in four months as buyers continue to battle both rising home prices and limited homes available for sale. The pending home sales index was down 0.9 percent but up 2.7 percent from a year ago. Modest gains in the Midwest and South were offset by larger declines in the Northeast and West.November’s dip continued the modestly slowing trend seen ever since pending sales peaked to an...

From bad to worse: Dallas Fed Mfg SurveyHighlightsTexas factory activity increased for a third month in a row in December. The production index, a key measure of state manufacturing conditions, rose from 5.2 to 13.4, indicating stronger growth in output. Some other indexes of current manufacturing activity also reflected growth in December, but the survey’s demand measures showed continued weakness.New orders, an indicator of incoming demand, declined at a faster pace. The index has been...

Claims readings could be distorted because a smaller share of those potentially eligible for benefits are applying. The share of recently unemployed workers seeking benefits has fallen this year to just above 50%, according to the National Employment Law Project, a group that advocates for the unemployed.The rate is down from record high of almost 80% just after the recession ended.The application rate typically declines as expansions age, but the current pace is the lowest in 15 years....

Down to +1.3%must be the rate hike at work…;)