Thursday, December 13, 2012

It's The Economy Stupid: A Bunch of Stuff

 

Economic Event

Period

Economic Survey

Actual Reported

Original Prior

Revised Prior

Advance Retail Sales

NOV

0.5%

0.3%

-0.3%

 

Retail Sales Less Autos

NOV

0.0%

0.0%

0.0%

 

Retail Sales Ex Auto & Gas

NOV

0.4%

0.7%

-0.3%

-0.1%

Retail Sales "Control Group"

NOV

0.3%

0.5%

-0.1%

0.0%

Producer Price Index MoM

NOV

-0.5%

-0.8%

-0.2%

 

PPI Ex Food & Energy MoM

NOV

0.1%

0.1%

-0.2%

 

Producer Price Index YoY

NOV

1.8%

1.5%

2.3%

 

PPI Ex Food & Energy YoY

NOV

2.2%

2.2%

2.1%

 

Initial Jobless Claims

NOV 16

369K

343K

370K

372K

Continuing Claims

NOV 17

3210K

3198K

3205K

3221K

 

 

Retail Sales are better, and that’s good.  Producer Prices were mixed, not rising greatly, and that’s a good thing.  Jobless Claims are down, and that could be a good thing, if the people are finding jobs and not falling out of the workforce.

 

After sleeping on it for a night, I think the Fed’s message was basically:  “We seem to be at a new normal, where long term structural unemployment has gone from 4.5% (the old normal) to 6.5% (the new normal), and we are going to keep rates low until we can move the lousy unemployment numbers down to the new normal and we are going to forget about the old normal for now.” 

 

The only problem is that as the Fed layers on more and more stimulus, each layer seems to produce less and less results.  So we are going to inflate the Fed balance sheet by another Trillion Dollars, and we are very likely to get less bang for our buck.  And my confidence in the Fed being able to unravel all of these Trillions of Dollars in security trades without serious negative side effects is near zero.  They may be good at what they do, but they are not that good.

 

 

John Broussard

Assistant State Treasurer

Chief Investment Officer

State of Louisiana

Department of the Treasury

Ph:  225-342-0013

Fx:  225-342-9721

Email:  jbroussard@treasusry.state.la.us

Street Address:

445 North Blvd, 7th Floor

Baton Rouge, LA 70802

Mailing Address:

P.O. Box 44154 Capitol Station

Baton Rouge, LA 70804-4154

Physical Location:

One City Plaza, 7th Floor

Corner of North Blvd & 4th Street

Exit 1B I-110 Convention Street,

Turn Left to get to North Blvd,

Turn Right on North Blvd

 

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