CPI is down YOY -.7 but the core number is still at 1.9%. Most of the decline is from the reversal of the oil and food shock of last year. We have evidence of the price shock effect when we look at the PPI numbers from earlier in the week. The food and energy component is the only place where we are seeing real movement.
The more important near-term number is the Empire Manufacturing index down only 4.55 from an expectation of -12. Another green shoot but within the green shoots are weeds. This is a positive for the US but when we look around the rest of the world the story in mixed. Europe is behind in the business cycle with poor GDP numbers for the first quarter. Japan machine orders is down 20+ percent from last year and leading indicators are still falling. Now the Economic Watchers survey shows some slight improvement for current and outlook conditions. UK industrial production is down over 12 percent and ILO unemployment rate is rising.
US retail sales declined to negative numbers from positive expectations this was something that was supposed to be counted on to help the equity rally. Initial and continuing jobless claims are still rising. Industrial production was negative though the U of Michigan confidence numbers are slightly higher.
The euphoria of the end of the free fall global economy is over, but this is not the same as a recovery. The US is probably ahead of Europe and Japan in the business cycle. This is point in the cycle is driven by the strong flood of cash from both monetary and fiscal side, yet the stimulus may not be enough to close the output gap.
The more important near-term number is the Empire Manufacturing index down only 4.55 from an expectation of -12. Another green shoot but within the green shoots are weeds. This is a positive for the US but when we look around the rest of the world the story in mixed. Europe is behind in the business cycle with poor GDP numbers for the first quarter. Japan machine orders is down 20+ percent from last year and leading indicators are still falling. Now the Economic Watchers survey shows some slight improvement for current and outlook conditions. UK industrial production is down over 12 percent and ILO unemployment rate is rising.
US retail sales declined to negative numbers from positive expectations this was something that was supposed to be counted on to help the equity rally. Initial and continuing jobless claims are still rising. Industrial production was negative though the U of Michigan confidence numbers are slightly higher.
The euphoria of the end of the free fall global economy is over, but this is not the same as a recovery. The US is probably ahead of Europe and Japan in the business cycle. This is point in the cycle is driven by the strong flood of cash from both monetary and fiscal side, yet the stimulus may not be enough to close the output gap.
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