Flash Update
FLASH UPDATE - June 26, 2007
JOHN WILLIAMS' SHADOW GOVERNMENT STATISTICS
FLASH UPDATE
June 26, 2007
__________
Last Month's Unusual Housing "Surge" Evaporates
__________
This short Flash Update covers the limited economic releases of the last week, primarily housing statistics. The economic calendar for the balance of this week will be covered in a Flash Update over the coming weekend, and the Hyperinflation Summary likely will be published at that time, as well. The June/July SGS newsletter will follow in the week of July 9th. All postings will be advised by e-mail. -- Best wishes to all, John Williams
Fed Remains Hamstrung Despite Mounting Dollar and Systemic
Liquidity Risks
Sporadic and irregular "positive" economic reports of the last month are proving fleeting, as I suggested, with some numbers revising sharply to the weak side. The housing numbers, for example, look again like they are in the middle of deepening recession.
The best of the leading housing indicators is housing starts, where May's seasonally-adjusted starts fell by 2.1% (down 3.5% net of revisions) for the month, following April's 1.0% gain, previously reported as a 2.5% gain. Year-to-year change in May was a contraction of 24.2%, compared with April's milder 17.3% decline (previously a 16.1% drop). On a three-month moving-average basis, May's annual sales were down by 22.0% against April's 24.1% decline.
Last month, headlines were made by April's soaring new home sales. The housing downturn was over, trumpeted Wall Street. Unfortunately, the data released today confirmed the re-softening environment. May's seasonally-adjusted new home sales declined by 1.6% (a 6.7% drop net of revisions), following a 12.5% revised April gain (initially reported at 16.2%). May's year-to-year decline stood at 15.8%, against April's revised 15.2% contraction, which originally was reported at 10.6%.
May's seasonally-adjusted existing new home sales declined by 0.3% for the month, following April's 2.3% monthly drop, and were down by 10.3% for the year.
Although a lagging economic indicator, declining consumer confidence generally is not viewed as a positive sign for housing. June's Conference Board measure turned negative on both a monthly and annual basis, down 4.2% from May, which was up 2.1% in revision, and June was down 1.4% from the year before, after a 3.6% gain in May.
The counterbalancing concerns of inflation and a softening economy are likely to keep the Fed's hands tied come Thursday's FOMC policy announcement. Despite mounting risks of a major dollar sell-off, and despite increasing concerns of a liquidity crisis tied to the sub-prime mortgage debacle, nothing actionable in formal policy has come before the U.S. central bank, yet. Upside risks to Fed rate action remain tied to the greenback's likely sell-off, while downside risk remains tied to any systemic liquidity crisis.
Further details will follow in the newsletter.
___________________________________________
The June/July "Shadow Government Statistics" monthly newsletter should be posted during the week of July 9th, following the release of the June employment data. An e-mail advice of same will be sent.
FLASH UPDATE
June 26, 2007
__________
Last Month's Unusual Housing "Surge" Evaporates
__________
This short Flash Update covers the limited economic releases of the last week, primarily housing statistics. The economic calendar for the balance of this week will be covered in a Flash Update over the coming weekend, and the Hyperinflation Summary likely will be published at that time, as well. The June/July SGS newsletter will follow in the week of July 9th. All postings will be advised by e-mail. -- Best wishes to all, John Williams
Sporadic and irregular "positive" economic reports of the last month are proving fleeting, as I suggested, with some numbers revising sharply to the weak side. The housing numbers, for example, look again like they are in the middle of deepening recession.
The best of the leading housing indicators is housing starts, where May's seasonally-adjusted starts fell by 2.1% (down 3.5% net of revisions) for the month, following April's 1.0% gain, previously reported as a 2.5% gain. Year-to-year change in May was a contraction of 24.2%, compared with April's milder 17.3% decline (previously a 16.1% drop). On a three-month moving-average basis, May's annual sales were down by 22.0% against April's 24.1% decline.
Last month, headlines were made by April's soaring new home sales. The housing downturn was over, trumpeted Wall Street. Unfortunately, the data released today confirmed the re-softening environment. May's seasonally-adjusted new home sales declined by 1.6% (a 6.7% drop net of revisions), following a 12.5% revised April gain (initially reported at 16.2%). May's year-to-year decline stood at 15.8%, against April's revised 15.2% contraction, which originally was reported at 10.6%.
May's seasonally-adjusted existing new home sales declined by 0.3% for the month, following April's 2.3% monthly drop, and were down by 10.3% for the year.
Although a lagging economic indicator, declining consumer confidence generally is not viewed as a positive sign for housing. June's Conference Board measure turned negative on both a monthly and annual basis, down 4.2% from May, which was up 2.1% in revision, and June was down 1.4% from the year before, after a 3.6% gain in May.
The counterbalancing concerns of inflation and a softening economy are likely to keep the Fed's hands tied come Thursday's FOMC policy announcement. Despite mounting risks of a major dollar sell-off, and despite increasing concerns of a liquidity crisis tied to the sub-prime mortgage debacle, nothing actionable in formal policy has come before the U.S. central bank, yet. Upside risks to Fed rate action remain tied to the greenback's likely sell-off, while downside risk remains tied to any systemic liquidity crisis.
Further details will follow in the newsletter.
The June/July "Shadow Government Statistics" monthly newsletter should be posted during the week of July 9th, following the release of the June employment data. An e-mail advice of same will be sent.