In other words, is this all there is? That was the question I had to ask myself today after reviewing weeks of economic reports that moved the needle slightly up or down, or reversed a trend ever so slightly, or gave multiple data points that danced around the same reading.
Looking for solid news of a rebounding recovery has been as elusive as the proverbial needle in a haystack. So the question remains, are we looking at it…. is the haystack the recovery? Is this as good as it gets?
Let’s take a look at the personal income and consumption report today from the Department of Commerce. The good news is if you are looking to buy a car, this might be a good time to do it ─ consumer spending remains soft, particularly in durable goods (up only 0.1 percent) but only if you have the money to spend, as personal income rose a lower-than-expected 0.1 percent for the month of January. Savings also dropped and spending on services was weak, up a modest 0.2 percent. Prices, however, remain tame with an increase of 0.0 percent for the month and a year-to-year increase of only 1.4 percent.
Recently, the construction industry became the focus of economic optimism. The larger-than-expected 2.8 percent January increase boosted hopes that the housing recovery was beginning to take root. But was the concentration of new apartment housing a sign that the “American Dream” (no, not beating Canada for the gold) of owning a home would again be out of range for most folks?
According to today’s construction spending report from the Department of Commerce, construction spending dipped by another 0.6 percent in January following a revised 1.2 percent dip in December. The biggest takeaway from the report: the fact that total construction is down by 9.3 percent for the year. Enough to start thinking about what kind of a boost construction could get following a small earthquake.
And then there’s the ISM Manufacturing Index for Feb, which came in at 56.5. The good news is manufacturing continues to hum along, boosting employment by 3 points to 56.1 and replenishing inventories. New orders, however, moderated their previously accelerating pace, dropping below 60 for the first time in several month. Backlog orders were up 5 points to 61, which bodes well for the sustainability factor.
So, again, is this the recovery we’ve all been hoping for? According to the famous lyrics of that existential lament “Is that all there is?” if that’s all there is my friends, then let’s keep dancing.
An increase in energy as well as new and used motor vehicles contributed to gains in the consumer price index for October, the Labor Department reported today. The department reported a one-month rise of 0.30 percent for October and a 0.20 percent increase for all items less food and energy, the same increase as September.
Price increases for used and new vehicles account for 90% of the increase in the all-items index. Prices for airline transportation and medical care also increased. The food index showed a slight increase of 0.10 percent, with dairy-related products showing the biggest increase in the food group.
Analysts expected a rise of 0.30 percent for the one-month all-items index, but expected a rise of only 0.10 percent for the one-month index excluding food and energy.
At the beginning of George W. Bush’s presidency, political rhetoric regarding China took the form of old-school Cold War mantras. At the time, US consumption and Chinese production were as dependent on one another as heroin addicts on Afghan poppies. Thus, the “threats” were nonsensical political scapegoats.
As President Obama makes his way through China, we are witnessing more silly talk. Part of the President’s agenda is to convince the Chinese that importing US goods will “create even more jobs on both sides of the Pacific.” Um, no.
If China steps up US imports, they will cannibalize their own production (i.e., jobs). While this would be partially offset by their need to have the US make money to pay off our insane debts to them, as each moment passes China’s economy is growing less dependent on US consumption.
With one of the largest populations on Earth, China’s internal consumption will ultimately offset historic dependence on foreign consumption of their goods. Like the mafia, eventually China will not care how we pay them their interest so long as we pay. Global politics is a fierce Machiavellian game. As Warren Buffett eloquently explained in I.O.U.S.A.: One Nation. Under Stress. In Debt,Thriftville owns Squanderville in the endgame:
Aren’t we tired of this BS? The cold hard truth for US citizens is we must work to create a sustainable economy. We must set our sights on explosive industries such as alternative energy and health technology. The longer we sit home and imagine the Chinese buying our shitty cars or exotic financial securities, the shorter the road to serfdom for more generations of US citizens who will be stuck paying off the reckless debts of our elders.
As with the previous administration, our government is wasting time giving empty speeches for the US media to pump at home. If you believe in the coming wave of jobs based on Chinese consumption of current US goods, I have some strongly defended US Dollars to sell you …
An increase in energy as well as new and used motor vehicles contributed to gains in the consumer price index for October, the Labor Department reported today. The department reported a one-month rise of 0.30 percent for October and a 0.20 percent increase for all items less food and energy, the same increase as September.
At the beginning of George W. Bush’s presidency, political rhetoric regarding China took the form of 
Thriftville owns Squanderville in the endgame:
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