Recession

     The Institute for Supply Management reported that its index of service sector business activity declined to 44.6 in January from a revised reading of 54.4 in December. I believe they were forecasting 53. Of course this is abysmal.Utilities, professional services and educational services were the only sectors reporting increases. The others were down.

    New orders fell to 43.5 while employment fell to 43.9. The employment picture is especially discocerting as it is looking forward.

     We are in recession! K

    

Laughing at the headlines…..

Some I have seen today: Housing Decline 25% Ahead!

                                                    17k Jobs Lost Last Month

                                                  

Stats out today……

New Orders New orders for manufactured durable goods in December increased $11.2 billion or 5.2 percent to $226.6 billion, the U.S. Census Bureau announced today. This was the second consecutive monthly increase and followed 0.5 percent November increase. Excluding transportation, new orders increased 2.6 percent. Excluding defense, new orders increased 2.9 percent.

Shipments Shipments of manufactured durable goods in December, down four of the last five months, decreased $0.1 billion or 0.1 percent to $212.6 billion. This followed a 0.2 percent November decrease.

Unfilled Orders Unfilled orders for manufactured durable goods in December, up thirty-one of the last thirty-two months, increased $20.0 billion or 2.5 percent to $808.6 billion. This was at the highest level since the series was first stated on a NAICS basis in 1992 and followed a 1.2 percent November increase.

Inventories Inventories of manufactured durable goods in December, up five of the last six months, increased $3.5 billion or 1.1 percent to $320.7 billion. This was also at the highest level since the series was first stated on a NAICS basis in 1992 and followed a 0.8 percent November increase.

Capital Goods Industries Nondefense

Nondefense new orders for capital goods in December increased $4.2 billion or 5.4 percent to $81.1 billion.

Defense

Defense new orders for capital goods in December increased $5.2 billion or 80.6 percent to $11.6 billion.

 

Don’t see how durable goods can be up with such horrible numbers on housing being released a day or two ago. Its hard for me to believe a damn thing this government releases…….K

Food Prices

     I did a bit of research on basic food staples and the percentage increases were quite astonishing. Milk is up some 30% in the past year, costing around 4.50 per gallon in our area.. Eggs are up 38% in the past year, pricing at around 1.90 or so and a loaf of bread, 24 ounce, is up around 12% for a price of 2.50 or so.

    Now the figures released by the government  in November say this equates to slightly over 5% for the seasonally adjusted annual rate and around 2.5% for all of 06. Of course, those of us living in the real world know that this does not seem correct. Its got to be more than that.

     Myself, I have had to make some serious adjustments in my shopping habits. The last few months I have had to start shopping by price. I have always been a brand loyal sorta guy but I have had to toss that out the window.  I have had to drastically reduce the beef I have purchased and have gone with the much cheaper pork steaks. I have had to forego the brand names and go with the private label stuff, some of which the quality is noticeably lower and some of which is just as good. You just have to buy and try.

                                                     Kevin

The Fed

   I just don’t know what to think about these guys(and a few girls), especially Bernanke, the Fed chairman. First this genius, tells us early last year that the subprime debacle(pre-debacle at that time)was well contained and would not spill over into other areas. Well, duh, look what happened Big Boy. Now, they are telling us that inflation is going to be tame in the coming year BUT…..growth is going to be at a measly 1.5% annually, which in turn will put a halt to job growth. Seems, we need 2.5% growth to keep the jobs coming. Do we believe anything they say?

     I know this is an extremely difficult position but I fear political pressures keep them from being forthright. Really, before they start talking recession, it is usually about over. The numbers we have been getting the past several months come no where close to matching the reality here at home.

  I miss Greenspan…..Kevin

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