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[unlawflcombatnt]

Evidence continues to mount that the U.S. economy is slowing down much more than predicted. Thursday's economic data was nearly all negative. Leading Indicators declined as predicted, leaving the 1-month change at -0.2%. Not surprisingly, the government has again downwardly revised previously published statistics. July's Leading Indicator total was downwardly revised to -0.2% from the previously published -0.1%. The biggest downward revisions came in manufacturers' Consumer Goods Orders, revised downward -0.13%, from +0.1% down to -0.12%. July's Manufacturing Workweek was also downwardly revised to +0.06% increase from the original +0.12%.

5 of the last 7 months have shown declines in Leading Indicators. Though the 6-month total is only a -0.6% change (less than the -1.0% suggestive of a recession), the 7-month total is -1.1%. Also worth noting, according to the Conference Board, the most important single indicator of the 10 leading indicators is the interest rate spread between the 10-year Treasury note and the Federal funds rate. This has also declined. August marks the 2nd straight decline in this number, going from -0.02 in July to -0.04 in August. Below is a modified copy of September 21st's Leading Indicator report from Briefing.com, with the previously posted (pre-revision) numbers for Leading Indicators on the bottom chart. The key alterations are underlined in red, with the previous numbers posted in italics next to the current numbers.

LEADING INDICATORS



The top part of this chart can also be found at: Briefing.com: Leading Indicators

An even more unsuspected decline came from the Philadelphia Fed Manufacturer Index. The actual index came in at -0.4, much worse than the predicted +13.0. This was the 1st negative reading since April 2003. The 6-month business outlook was also negative at -0.2. This was the 1st negative reading on the 6-month outlook since before the last recession. Most of the individual components of the index are at their lowest level in 6 years, according to the Philadelphia Fed. Below is a modified copy of the Philadelphia Fed report from Briefing.com. Again the "predicted" results from 9/20/06 are shown on the bottom chart. The current total and previously predicted total are underlined in red.

PHILADELPHIA FED MANUFACTURING INDEX


The top part of this chart can be found at Briefing.com: Philadelphia Fed

A graphic representation of the state of our economy can be seen from the red line in the Leading Indicators graph below from Briefing.com. Notice the current steep drop in Leading Indicators parallels a similar drop leading up to the 2001 recession.



unlawflcombatnt

EconomicPopulistCommentary

Economic Patriot Forum

_________________
The economy needs balance between the "means of production" & "means of consumption."

[beachbum bob]

everything is rosey...except the stuff that aint...oops CD rates approaching 6%...telltale sign of what true inflation really is

[unlawflcombatnt]

The decline is being led by the Housing Bubble Bursting. Monday's Existing Home Sales numbers further verify that the housing market is in free fall. Monday's annual rate of Existing Home Sales fell for the 5th straight month. This marks a 14% decline since August 2005. Home prices fell for the first time since May 1995. The median price is now down -1.7% since August of last year. Median price increases have been steadily declining, from August 2005's annualized rate of price increase of 15.8%, to the current annualized rate of -1.7%.

The unsold inventory of homes continues to rise. Measured in terms of months' worth of supply at current sales rate, the unsold inventory has increased 60% since August of 2005.

Below is a copy of a page from the current Briefing.com report on Existing Home Sales. At the bottom is a composite chart showing the 12-month changes in sales, unsold inventory, and price changes.



Despite the abundance of negative news, real estate propagandists such as NAR president David Lereah continue to deny the bursting of the housing bubble. Regardless of the false optimism of real estate propagandists, the housing bubble is bursting. With unsold supply increasing, prices have nowhere to go but down.

unlawflcombatnt

EconomicPopulistCommentary

Economic Patriot Forum

_________________
The economy needs balance between the "means of production" & "means of consumption."

[marapets]

a slowing economy terrible news for the white house how are they going to pay back all that debt with lower than expecteed tax revenues