Finally, the monthly jobs report starts to make a little sense. Today, the much-anticipated April report from the U.S. Bureau of Labor Statistics showed a net gain of 160,000 jobs in the U.S. economy, well less than the 200,000+ expected. Goldman Sachs yesterday upped their estimate for today’s report to 245,000! Nice call.
As I reported earlier today, the monthly ISM Manufacturing New Orders Index is flashing recession. The March data was released on May 2 and it shows that New Orders have now declined for 17 straight months on a year-over-year basis, with March dropping 4.2% from a year ago.
On Friday, we get the April jobs report from the U.S. government. This report may matter more than most.
This morning, the U.S. Department of Commerce reported that March factory orders rose 1.1% from February—more than the 0.6% expected. Good news? Not if you look back; March factory orders actually declined for the 17th consecutive month on a year-over-year basis, dropping 4.2% from a year ago.
As I reported last month, February’s Durable Goods report was extremely weak. Consequently, expectations were high for a March rebound but what we got this week in the March Durable Goods report was a bounce of just 0.8% month-over-month (M/M), missing expectations of a 1.9% surge. Dead cats bounce better than that.
We are watching the major stock indices flirt with new highs but not quite making them. Most players now seem to be thinking it’s only a matter of time. But the smaller companies may be telling us otherwise.
Market commentators are now embracing the idea that the S&Ps are going to new highs. The financial sector is the largest in the index. Simply put, there will be no new highs without the bank stocks. So, let’s look at how they are doing.
As I wrote back on March 26, there is no better indicator of the health of the US economy than housing. Not that it should be so important. But America is a consumer society and housing is the biggest ticket item there is for most people.
Retail sales numbers released today for March were down a disastrous -0.3% month-over-month. Usually, when you see a number this bad you also see an excuse. The most common excuse recently has been gasoline sales falling because gasoline prices have collapsed. Not this time, baby. Gasoline sales were up 0.9%–just about the only thing that was up.
Mainstream economists and TV talking heads tell us that the current slowdown in economic activity is ‘transitory’. Not to worry, they say, it’s just a slow patch.