US recession data marches on

Last night’s US data was not reassuring. The two North Eastern Fed manufacturing indices both missed market expectations. The Empire State Index fell further, prices rose and employment dropped, a nasty combination:

The Empire State Manufacturing Survey indicates that conditions for New York manufacturers worsened for a fourth consecutive month in September. The general business conditions index inched down one point, to -8.8. The new orders index held steady at -8.0, while the shipments index dropped sixteen points to -12.9. The inventories index, negative for a third month in a row, fell to -12.0—a sign that inventories continued to decline. After dropping significantly over the summer, the indexes for both prices paid and prices received climbed several points, suggesting that the pace of price increases picked up. Employment indexes were below zero, indicating that employment levels and hours worked fell over the month. Indexes for the six-month outlook were somewhat better than last month and generally suggested that business activity was expected to improve in the months ahead, but optimism remained well below its levels of earlier this year.

The Philly Fed did bounce back from its early August hammering and the mix was better, but it remains quite suppressed, and well below market hopes:

According to respondents to the September Business Outlook Survey, the region’s manufacturing sector contracted for the second consecutive month. The survey’s indicators suggest an overall decline in demand for manufactured goods in September, although the breadth of decreases was not as great as in August. On balance, employment was slightly higher at reporting firms this month. The broadest indicators for future growth improved notably this month, suggesting that firms expect a recovery in activity over the next six months. Responses to special questions, however, suggest that the firms expect further weakening in their rate of production growth during the fourth quarter.

Adding to the gloomy jobs outlook, the DOL reported that Weekly Jobless Claims are rising again:

In the week ending September 10, the advance figure for seasonally adjusted initial claims was 428,000, an increase of 11,000 from the previous week’s revised figure of 417,000. The 4-week moving average was 419,500, an increase of 4,000 from the previous week’s revised average of 415,500.

And the BLS also reported that August CPI came in hot:

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.4 percent in August on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 3.8 percent before seasonal adjustment.

The seasonally adjusted increase in the all items index was broad-based, with continuing increases in the indexes for gasoline, food, shelter, and apparel. The gasoline index rose for the 12th time in the last 14 months and led to a 1.2 percent increase in the energy index, while the food index rose 0.5 percent, its largest increase since March.

No sign of prices easing here. Calculated Risk quoted the key measures:

According to the Federal Reserve Bank of Cleveland, the median Consumer Price Index rose 0.3% (3.6% annualized rate) in August. The 16% trimmed-mean Consumer Price Index increased 0.3% (4.0% annualized rate) during the month. The median CPI and 16% trimmed-mean CPI are measures of core inflation calculated by the Federal Reserve Bank of Cleveland based on data released in the Bureau of Labor Statistics’ (BLS) monthly CPI report.

Earlier today, the BLS reported that the seasonally adjusted CPI for all urban consumers rose 0.4% (4.6% annualized rate) in August. The CPI less food and energy increased 0.2% (3.0% annualized rate) on a seasonally adjusted basis.

Over the last 12 months, the median CPI rose 2.0%, the trimmed-mean CPI rose 2.4%, the CPI rose 3.8%, and the CPI less food and energy rose 2.0%.

It’ll be courageous Fed that wades into full blown QE3 now. Little wonder that we saw QE favourites gold and grains getting thumped, even though the $US fell on a rising euro.

And to finish an evening of discouraging news flow, head tea-bagger, John Boehner, made it pretty obvious that Obama’s jobs plan has an ice block’s chance in hell of getting through Congress unmelted. From Bloomberg:

Boehner said the House will consider President Barack Obama’s $447 billion jobs plan, which includes cuts in payroll taxes, provides tax breaks for hiring by small businesses, and more spending for infrastructure. The speaker made clear he opposes much of it, calling instead for Republican ideas to boost job growth, such as reducedgovernment regulation.

“The president’s proposals are a poor substitute for the pro-growth policies that are needed to remove barriers to job creation in America, the policies that are needed to put America back to work,” Boehner said. He called on Obama to direct his cabinet secretaries to temporarily halt all work “that gets in the way of private-sector job creation.”

Equity markets are very oversold and clearly want to rally but the underlying reality remains deeply concerning.