Flash Update
FLASH UPDATE - May 20, 2007
JOHN WILLIAMS' SHADOW GOVERNMENT STATISTICS
FLASH UPDATE
May 20, 2007
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Alternate CPI Holds at 10.2% Annual Inflation
Industrial Production and Housing Data Show Faltering Economy
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The SGS Alternate Consumer Price Measure has been updated for April and posted to the Alternate Data Series tab at www.shadowstats.com. -- Best wishes to all, John Williams
Annualized Year-to-Date CPI Shows Serious Inflation
There was little startling in last week's economic reporting, net of some major revisions and usual seasonal-factor distortions. The inflationary recession continues, and data in the weeks ahead should confirm ongoing deterioration.
CPI. The seasonally-adjusted April CPI-U rose 0.42% (0.65% unadjusted) +/- 0.12% for the month, following March's 0.61% (0.91% unadjusted) gain. Annual inflation (unadjusted) eased to 2.57% in April, from 2.78% in March. Restated to Pre-Clinton (1990) methodologies, annual inflation was roughly 5.9%; restated to Pre-Reagan (1980) methodologies (SGS Alternate Measure), annual inflation in April held at about 10.2% (10.18% April, 10.24% March).
The Chained-CPI-U (the fully substitution-based index being groomed to takeover for the CPI-U) showed April annual inflation of 2.35% against 2.46% in March.
Seasonal adjustment of the CPI never has been a particularly meaningful exercise, but it does allow for the massaging of the month-to-month adjusted number that causes the markets to gyrate. The Bureau of Labor Statistics even reports the number standardly on an unadjusted basis, to wit, the opening text in the April 2007 CPI report is:
"The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.6% in April, before seasonal adjustment ..."
The seasonally-adjusted 0.4% does not get mentioned until the fourth paragraph, under a subheading, along with the "core" inflation number, where those data are formulated into a financial-market antidepressant.
The BLS uses seasonal factors to understate monthly inflation from January through May, with payback usually seen in the latter part of the year. Consider that on an adjusted basis the annualized rated of CPI inflation for April versus December was 4.81%. The same number on an unadjusted basis was 7.44%. Even at a 4.81% annualized rate, the market hype of "contained inflation" remains utter nonsense.
Industrial Production. Seasonally-adjusted April industrial production gained 0.7% (0.4% net of revisions) following March's 0.3% (previously 0.2%) contraction. Reflecting the prior-period revisions, however, annual growth in production slowed to 1.88% in April -- the weakest showing since the series came out of the last recession -- down from 2.07% in March.
Housing Starts. The annual benchmark revision was background to the seasonally-adjusted 2.5% +/- 11.3% monthly gain in April housing starts. The annual pace of contraction narrowed to 16.1% from 24.1% in March, as the series went against the prior year's extraordinary monthly and annual growth plunges. Annual change on a three-month moving average basis was a 23.4% contraction, narrowed from a 31.0% drop in March. Collapsing building permits suggest there has been no change in housing fundamentals.
Further details will follow in the newsletter.
___________________________________________
May's "Shadow Government Statistics" monthly newsletter should be posted during the week of May 28th. An e-mail advice of same will be sent.
FLASH UPDATE
May 20, 2007
__________
Alternate CPI Holds at 10.2% Annual Inflation
Industrial Production and Housing Data Show Faltering Economy
__________
The SGS Alternate Consumer Price Measure has been updated for April and posted to the Alternate Data Series tab at www.shadowstats.com. -- Best wishes to all, John Williams
There was little startling in last week's economic reporting, net of some major revisions and usual seasonal-factor distortions. The inflationary recession continues, and data in the weeks ahead should confirm ongoing deterioration.
CPI. The seasonally-adjusted April CPI-U rose 0.42% (0.65% unadjusted) +/- 0.12% for the month, following March's 0.61% (0.91% unadjusted) gain. Annual inflation (unadjusted) eased to 2.57% in April, from 2.78% in March. Restated to Pre-Clinton (1990) methodologies, annual inflation was roughly 5.9%; restated to Pre-Reagan (1980) methodologies (SGS Alternate Measure), annual inflation in April held at about 10.2% (10.18% April, 10.24% March).
The Chained-CPI-U (the fully substitution-based index being groomed to takeover for the CPI-U) showed April annual inflation of 2.35% against 2.46% in March.
Seasonal adjustment of the CPI never has been a particularly meaningful exercise, but it does allow for the massaging of the month-to-month adjusted number that causes the markets to gyrate. The Bureau of Labor Statistics even reports the number standardly on an unadjusted basis, to wit, the opening text in the April 2007 CPI report is:
"The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.6% in April, before seasonal adjustment ..."
The seasonally-adjusted 0.4% does not get mentioned until the fourth paragraph, under a subheading, along with the "core" inflation number, where those data are formulated into a financial-market antidepressant.
The BLS uses seasonal factors to understate monthly inflation from January through May, with payback usually seen in the latter part of the year. Consider that on an adjusted basis the annualized rated of CPI inflation for April versus December was 4.81%. The same number on an unadjusted basis was 7.44%. Even at a 4.81% annualized rate, the market hype of "contained inflation" remains utter nonsense.
Industrial Production. Seasonally-adjusted April industrial production gained 0.7% (0.4% net of revisions) following March's 0.3% (previously 0.2%) contraction. Reflecting the prior-period revisions, however, annual growth in production slowed to 1.88% in April -- the weakest showing since the series came out of the last recession -- down from 2.07% in March.
Housing Starts. The annual benchmark revision was background to the seasonally-adjusted 2.5% +/- 11.3% monthly gain in April housing starts. The annual pace of contraction narrowed to 16.1% from 24.1% in March, as the series went against the prior year's extraordinary monthly and annual growth plunges. Annual change on a three-month moving average basis was a 23.4% contraction, narrowed from a 31.0% drop in March. Collapsing building permits suggest there has been no change in housing fundamentals.
Further details will follow in the newsletter.
___________________________________________
May's "Shadow Government Statistics" monthly newsletter should be posted during the week of May 28th. An e-mail advice of same will be sent.