In a good sign for inflation and long term growth, but a potentially bad sign for short term consumption spending consumer credit decreased at an annual rate of 1/2 percent in September 2006, according to the Federal Reserve G.19 Release on Consumer Credit released Tuesday. The decrease resulted from nonrevolving credit dropping more than revolving credit increased.
For the third quarter as a whole, consumer credit increased at an annual rate of 3-1/2 percent.
The economic indicator results this week are packed into three days, with a report on consumer credit from the Fed kicking off the week Tuesday, two weekly indicators on petroleum and mortgage applications released Wednesday and the bulk of reports coming out in one day. Thursday, we’ll get a Bank of England Announcement alongside UK leading indicators, import/export price indexes, US international trade and wholesale trade and the weekly Jobless Claims report. Tuesday’s US election results has the potential to move markets worldwide, whichever way it goes.
Accredited Home Lenders Holding Co [Ticker: LEND; Industry: Mortgage Investment ]
XM SATELLITE RADIO [Ticker: XMSR; Industry: Broadcasting - Radio ] Talk radio and music fans have their fingers crossed that someday XM and Sirius will turn a profit. This week, let’s just hope XM beats the street.
11 AM Eastern: 3-Month and 6-Month T-Bill Announcements
1 PM Eastern: 10-Year Note Auction
No auctions or announcements
Each of the upcoming financial items with the exception of Treasury auctions and announcements will be linked in this post as they become available. Housing market indicators will be featured on RealNews under the Housing Market category. Job market indicators wil be featured at Jobs Calling under the Job Market category. International indicators will be featured at Growing Global under the Economic Indicators category. General US economic indicators will be featured on this site, Financial Options, under Economic Indicators category.
The earnings releases listed are companies I’ve chosen because of their industries, because of market capitalization (the size of the company), because they have local plants in my area or for various other reasons of general interest. Please do not take these as a â€œrecommendationâ€ of any sort. That I list them here simply means that I think the results may be interesting for any number of reason – I may occasionally even choose companies where I expect negative results.
Business activity in the non-manufacturing sector increased at a faster rate in October 2006, according to the Non-Manufacturing ISM Report On Business released Friday; the Business Activity/Production Index increased from 52.9 to 57.1 with any number over 50 representing growth in the sector. New orders declined to 56.5 from 57.2, employment declined to 51.0 from 53.6 and, in good news for inflation, prices declined to 51.9 from 56.7.
WHAT RESPONDENTS ARE SAYING
“Improved outlook and confidence in the economy.” (Educational Services)
“Business continues to be strong.” (Management of Companies & Support Services)
“General market conditions are still trending down. Order cancellation rates are higher month over month. New orders are stronger, but are still lower than expected.” (Construction)
“Total lending and lending income increased, savings decreased.” (Finance & Insurance)
“Things are improving from the standpoint of activity. There remains a constraint of resources such as labor and transportation.” (Retail Trade)
New orders for manufactured goods rose to to $411.2 billion, a 2.1% increase in September, while inventories rose to $479.4 billion, a 0.6% increase, according to a Commerce Department report released Thursday. The inventory-to-sales ratio increased to 1.22 from 1.17 in August, helping reduce inflation pressures on manufactured goods.
Manufacturing productivity grew in the third quarter according to a Bureau of Labor Statistics release. Productivity grew 5.9 percent in manufacturing, 8.6 percent in durable goods manufacturing, and 2.0 percent in nondurable goods manufacturing. In the nonfarm business sector generally productivity was unchanged.
Ford, Chrysler, General Motors, Honda and Toyota all reported increased sales in the US in October 2006. Ford’s October US sales rose 8% to 215,985. Chrysler sales rose 1% over October 2005 to 159,586 units. General Motors retail sales rose 36% to 301,317. Honda and Acura sales rose 3.7% to 110,624. Toyota reported a 13.6% increase to its best ever October sales record of 189,011.
All sales figures are adjusted based on the number of sales days in the month.
The Institute for Supply Management’s PMI index fell 1.7 points to 51.2 in October, with any number above 50 indicating growth in the manufacturing economy, according to the Institute for Supply Management’s Manufacturing ISM Report on Business released Wednesday. The manufacturing economy grew for the 41st consecutive month and the overall economy grew for the 60th consecutive month, but the PMI was at its lowest level since June 2003.
Despite the moderation in growth in the PMI, the report contained some indications of potential inflation with new orders, production and employment growing while inventories are being depleted and deliveries are slowing. In good news for current inflation, the Prices Index fell from 61 to 47.
Institute for Supply Management,Manufacturing Economy,Manufacturing
US total commercial petroleum inventories (excluding the Strategic Reserve) fell again during the week ending October 27, 2006, down 3.4 million barrels according to the Energy Information Administration. Crude oil inventories rose by 2.0 million barrels (0.6%) to a total 334.3 million barrels as crude imports rebounded by 5.5% to 10.1 million barrels per day. Gasoline inventories fell by 2.8 million barrels and distillate fuels dropped by 2.7 million barrels including a decline in heating oil of 1.5 million barrels.
Refinery activity increased with inputs up 2.7% to 15.3 million barrels per day and refineries operating at 88.9% of capacity. The four week average for petroleum useage was up 5.5% from the same period last year with increased use of gasoline, distillate fuel and jet fuel.
This Week in Petroleum addresses the criticism that oil traders seem a bit disjointed in their explanations of day to day fluctuations in oil prices and notes that the weekly inventory report is one of the best indicators of general trends rather than day to day activity. A specific trend they note:
One observation appears to be that demand growth for key oil products in the United States has recently accelerated.