Flash Update
FLASH UPDATE - Mar. 18, 2007
JOHN WILLIAMS' SHADOW GOVERNMENT STATISTICS
FLASH UPDATE
March 18, 2007
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Resurging Inflation Again Sinks Real Retail Sales
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The March SGS Newsletter is targeted for Monday 26th. The SGS Alternate Data tab (www.shadowstats.com) has been updated for the SGS Alternate Consumer Price Measure for February 2007, while Continuing M3 has been revised for February, based on data for the full month. -- Best wishes to all, John Williams
Inflationary Recession Intensifies
In advance of next week's newsletter, last week's CPI, PPI, retail sales and industrial production releases added some new detail to the continuing deterioration in current economic and inflation conditions. Indeed, as the markets may be beginning to understand, a weak economy and rising inflation can happen together.
Inflation Surge. Surprising the markets on the upside, the producer price index (PPI) rose a seasonally-adjusted 1.3% (1.1% unadjusted) in February after a 0.6% drop (0.8% gain unadjusted) in January. Annual PPI inflation rose to 2.5% in February from 0.2% in January. Intermediate and crude goods rose 1.1% and 8.9% respectively for the month of February.
Also surprising the markets, seasonally-adjusted consumer price index (CPI-U) gained 0.4% (0.5% unadjusted) in February, following a 0.2% (0.3% unadjusted) increase in January. Annual CPI inflation rose to 2.4% in February from 2.1% in January. Annual inflation in the Chain-Weighted CPI-U (C-CPI-U) rose to 2.2% in February from 1.9% in January.
Net of methodological gimmicks that have been used in recent decades to dampen the reporting of inflation, February's Pre-Clinton CPI annual inflation (based on 1990 methodology) was 5.7%, while the SGS Alternate Consumer Price Measure (based on 1980 methodology) was 10.0%.
Troubled Retail and Production Statistics. While seasonally-adjusted industrial production rose by 1.0% in February, following a 0.3% contraction in January (previously reported as a 0.5% contraction), the monthly numbers continued gyrating in the aftershocks of the unusual weather of the last three months. February utility usage surged by 6.7% in the month, for example, which should have been close to zero if the weather and seasonal adjustments were moving in tandem. With similar distortion, annual growth as of February rose to 3.4% from 2.7% in January.
More importantly, revisions to fourth-quarter industrial production now leave that quarter's seasonally-adjusted annualized quarterly contraction at 1.25%, a deeper tumble than the 0.78% reported last month, and suggestive of some further downside revision to fourth-quarter GDP in the upcoming "final" estimate.
Seasonally-adjusted retail sales rose by 0.1% in February (zero growth net of revisions), following zero growth in January. With CPI up by 0.4% in February and by 0.2% in January, 2007 has started off with negative real (inflation-adjusted) retail sales growth. Net of inflation, first-quarter retail sales are on track to show a quarterly real contraction, an event rarely seen outside of recession. Net of inflation, annual growth in February retail sales was 0.8%, against 0.1% in January (annual real growth below 1.8% is a recession indicator).
Further details follow in the next newsletter.
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March's "Shadow Government Statistics" monthly newsletter is targeted for publication by Monday, March 26th.
FLASH UPDATE
March 18, 2007
__________
Resurging Inflation Again Sinks Real Retail Sales
__________
The March SGS Newsletter is targeted for Monday 26th. The SGS Alternate Data tab (www.shadowstats.com) has been updated for the SGS Alternate Consumer Price Measure for February 2007, while Continuing M3 has been revised for February, based on data for the full month. -- Best wishes to all, John Williams
In advance of next week's newsletter, last week's CPI, PPI, retail sales and industrial production releases added some new detail to the continuing deterioration in current economic and inflation conditions. Indeed, as the markets may be beginning to understand, a weak economy and rising inflation can happen together.
Inflation Surge. Surprising the markets on the upside, the producer price index (PPI) rose a seasonally-adjusted 1.3% (1.1% unadjusted) in February after a 0.6% drop (0.8% gain unadjusted) in January. Annual PPI inflation rose to 2.5% in February from 0.2% in January. Intermediate and crude goods rose 1.1% and 8.9% respectively for the month of February.
Also surprising the markets, seasonally-adjusted consumer price index (CPI-U) gained 0.4% (0.5% unadjusted) in February, following a 0.2% (0.3% unadjusted) increase in January. Annual CPI inflation rose to 2.4% in February from 2.1% in January. Annual inflation in the Chain-Weighted CPI-U (C-CPI-U) rose to 2.2% in February from 1.9% in January.
Net of methodological gimmicks that have been used in recent decades to dampen the reporting of inflation, February's Pre-Clinton CPI annual inflation (based on 1990 methodology) was 5.7%, while the SGS Alternate Consumer Price Measure (based on 1980 methodology) was 10.0%.
Troubled Retail and Production Statistics. While seasonally-adjusted industrial production rose by 1.0% in February, following a 0.3% contraction in January (previously reported as a 0.5% contraction), the monthly numbers continued gyrating in the aftershocks of the unusual weather of the last three months. February utility usage surged by 6.7% in the month, for example, which should have been close to zero if the weather and seasonal adjustments were moving in tandem. With similar distortion, annual growth as of February rose to 3.4% from 2.7% in January.
More importantly, revisions to fourth-quarter industrial production now leave that quarter's seasonally-adjusted annualized quarterly contraction at 1.25%, a deeper tumble than the 0.78% reported last month, and suggestive of some further downside revision to fourth-quarter GDP in the upcoming "final" estimate.
Seasonally-adjusted retail sales rose by 0.1% in February (zero growth net of revisions), following zero growth in January. With CPI up by 0.4% in February and by 0.2% in January, 2007 has started off with negative real (inflation-adjusted) retail sales growth. Net of inflation, first-quarter retail sales are on track to show a quarterly real contraction, an event rarely seen outside of recession. Net of inflation, annual growth in February retail sales was 0.8%, against 0.1% in January (annual real growth below 1.8% is a recession indicator).
Further details follow in the next newsletter.
March's "Shadow Government Statistics" monthly newsletter is targeted for publication by Monday, March 26th.