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Thursday, July 10, 2003

Some 'Selective' Information

In my last post I mentioned that there was a bit of information around to back the view that the 'recovery' may not be exactly what the markets are expecting. The main evidence is, of course, the employment data. But since I think we're all agreed that this may be a lagging indicator we can't read too much into this yet.

Then there's the output gap, and Brad's musings about when "real GDP will begin to grow at the 3.5% per year pace that we think is needed to keep the unemployment rate from rising, or the 4.0% per year pace that we think is necessary if unemployment is to start to decline (and even then only slowly: by perhaps 0.2 percentage points per year)".

But there are also a lot of other incidental details which may give us clues (of course these clues are selective, in the same way that all 'information' is in some sense selective).

Firstly This One

Inventories at U.S. wholesalers unexpectedly fell for a second straight month in May, the government said on Wednesday, as sales also sagged. The Commerce Department said wholesale stocks dipped 0.3 percent in the month, as inventories of durable goods -- those meant to last three or more years -- and non-durable products slipped. Wall Street economists had expected inventories to post a 0.2 percent gain after a revised 0.3 percent slide in April. Wholesale sales also slid. They fell by 0.5 percent after a revised 2.5 percent decline in April, the biggest drop in Commerce's records
Source: Yahoo News

Then This

More Americans struggled with their credit card bills in May than a year earlier, as rising job losses took a toll on cardholders' ability to meet monthly payments, Moody's Investors Service said on Wednesday. "The relatively weak economy, especially with respect to the job market, continued to make it more difficult for consumers to repay their debts," the bond rating agency said in a statement. Last week, the U.S. Labor Department said the nation's jobless rate climbed in June to 6.4 percent, the highest in nine years, from May's 6.2 percent. Moody's delinquency index on credit card payments 30 days late rose to 5.20 percent in May from 4.86 percent a year ago, but declined from 5.25 percent in April. The year-over-year delinquency rate has risen in the past four consecutive months, Moody's said.
Source: Yahoo News

And This

Demand in the United States for loans to buy homes and refinance mortgages fell in the July 4 holiday week as interest rates crept higher, an industry group reported on Wednesday. The drop in applications for mortgage loans was, in part, due to the holiday weekend that lured Americans to beaches and parks. The Mortgage Bankers Association of America said its measure of demand for refinancings, the refinancing index, fell 21.3 percent to 6,768.3, while its gauge of demand for loans to buy a home, the purchase index, fell 5.5 percent to 414.1. "We adjust as best as we can for the holiday affect. It is mostly the higher rates," said Douglas Duncan, the association's chief economist, adding that some of last week's decline in activity was also due to the July 4 U.S. Independence Day holiday. The trade group's measure of overall lending activity, the market index, fell 17.7 percent to 1,346.3 and 30-year loan contract rates rose to 5.37 percent in the July 4 week from 5.23 percent in the previous week. The record low was 4.99 percent in the June 13 week.
Source: Yahoo News

So there it is, now you go away and make up your own minds. BTW, what does it say on the reverse side of the greenback?

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