Bidenomics! Industrial Production Unexpectedly Heads Lower In May, Still Signaling Stagnation (Joe’s Pacific Coast To Indian Ocean Railroad Hasn’t Kicked In Yet)

I wonder if Biden’s proposed railroad from the Pacific to the Indian Ocean will generate massive industrial production growth? Is this more Bidenomics??

Industrial production unexpectedly dips in May. It peaked eight months ago.

On a year-over-year basis, May’s Industrial Production declined to a lame 0.23%. As The Fed hikes rates and slows M2 Money growth.

Today the Fed released its Industrial Production and Capacity Utilization report for May 2023.

Industrial production edged down 0.2 percent in May following two consecutive months of increases. The Bloomberg Econoday consensus was a small increase.
In May, the index for manufacturing ticked up 0.1 percent, while the indexes for mining and utilities fell 0.4 and 1.8 percent, respectively.
The index for motor vehicles and parts moved up 0.2 percent in May after jumping nearly 10 percent in April.
At 103.0 percent of its 2017 average, total industrial production in May was 0.2 percent above its year-earlier level.
Capacity utilization moved down to 79.6 percent in May, a rate that is 0.1 percentage point below its long-run (1972–2022) average.

Peak Months For 5 Indexes

Industrial Production: September 2022, 103.5
Manufacturing: October 2022, 101.2
Motor Vehicles and Parts, new high this month, 112.1
Consumer Durable Goods: April 2022, 109.4
Manufacturing Durable Goods: January and April 2023: 129.8

Despite the strength in autos, no debt led by Biden’s EV push and subsidies, manufacturing production is still below where it was seven month’s ago.

A long term chart better shows the trends.

Industrial Production Index Since 1972

*Industrial production data from the Fed, Chart by Mish*

Recession Lead Time After Industrial Production Peak

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Bidenomics! US Public Debt Breaks $32 TRILLION Barrier, Up 200% Since Obama/Biden (And Unfunded Liabilities At $192 Trillion With No End In Sight) Our Money Belongs To Them!

Money makes DC go around. Particularly when there are no effective constraints on the Administration or Congress’s ravenous appetite for insane spending (like Biden bragging about the US funding a large solar energy in Angola while he leaves the southern border wide open). After all, Biden, Schumer and McConnell all believe our money (along with our children) belong to them.

So, since the coronation of King Barack in 2009, US public debt has grown by 200% and just breached $32 trillion. US M2 Money is up 152% since Obama/Biden and The Fed’s Balance sheet is up 275% and M2 Money Velocity is down -30% since Obama/Biden.

And there is no end in sight for US debt expansion. There is $192 in unfunded liabilities which will require much more debt.

Now you know why people are flocking to cryptocurrencies. Washington DC spending and debt issuance is out of control.

Our money belongs to DC politicians and The Donor Class.

A joint meeting of the Biden Administration and Congress.

Fed Officials Say Rates May Need to Go Higher to Tame Inflation (Fats Waller And Elen Barkin Want To Raise Rates)

Governor Waller cites slow progress on core inflation
Richmond Fed chief Barkin says he’s comfortable doing more

Two Federal Reserve officials said the central bank may have to raise interest rates further to tame price pressures that in some sectors aren’t showing much sign of easing.

Fed Governor Christopher Waller said Friday headline inflation has been “cut in half” since peaking last year, but prices excluding food and energy (aka, CORE inflation) has barely budged over the last eight or nine months.

“That’s the disturbing thing to me,” Waller said during a question-and-answer session following a speech in Oslo, Norway. “We’re seeing policy rates having some effects on parts of the economy. The labor market is still strong, but core inflation is just not moving, and that’s going to require probably some more tightening to try to get that going down.”

At a separate event Friday, Richmond Fed President Thomas Barkin said inflation remained “too high” and was “stubbornly persistent.”

“I want to reiterate that 2% inflation is our target, and that I am still looking to be convinced of the plausible story that slowing demand returns inflation relatively quickly to that target,” Barkin said in a speech in Ocean City, Maryland. “If coming data doesn’t support that story, I’m comfortable doing more.”

The Federal Open Market Committee paused its series of interest-rate hikes Wednesday, but policymakers projected rates would move higher than previously expected in response to surprisingly persistent price pressures and labor-market strength.

The consumer price index this week showed headline inflation slowed, but core prices excluding food and energy continued to rise at a pace that’s concerning for Fed officials. Employers continued adding jobs at a rapid clip in May, and job openings climbed in April, recent data showed.

Barkin warned that prematurely loosening policy would be a costly mistake.

“I recognize that creates the risk of a more significant slowdown, but the experience of the ’70s provides a clear lesson: If you back off inflation too soon, inflation comes back stronger, requiring the Fed to do even more, with even more damage,” he said. “That’s not a risk I want to take.”

Policy Report

Separately, the Fed released a new report Friday that said tighter US credit conditions following bank failures in March may weigh on growth, and that the extent of additional policy tightening will depend on incoming data.

“The FOMC will determine meeting by meeting the extent of additional policy firming that may be appropriate to return inflation to 2% over time, based on the totality of incoming data and their implications for the outlook for economic activity and inflation,” the Fed said in in its semi-annual report to Congress.

Read More: Fed Says Tighter Credit Conditions to Weigh on US Growth

The Fed report, which provides lawmakers with an update on economic and financial developments and monetary policy, was published on the central bank’s website ahead of Chair Jerome Powell’s testimony before the House Financial Services Committee on June 21. He will appear before the Senate banking panel the following day.

“Evidence suggests that the recent banking-sector stress and related concerns about deposit outflows and funding costs contributed to tightening and expected tightening in lending standards and terms at some banks beyond what these banks would have reported absent the banking-sector stress,” the report said.

Fats Waller

and Elen Barkin.

Nvidia Soars While Bitcoin, Dollar, Gold Decline (Dogecoin Leads Cryptos This AM)

The Artificial intelligence (AI) boom is resulting in Nvidia’s stock soaring to 429.9. At the same time, Bitcoin (yellow), the US Dollar (blue) and Gold (gold) are declining.

Of course, markets are dynamic and gold/silver are likely to start up again along with bitcoin and other cryptos..

The leading crypto today? Dogecoin!

AI versus no intelligence. I give you Resident Joe Negan.

NOT Always Sunny! Philly Fed Business Outlook Falls To -13.7 As Retail Sales Surprise To The Upside (1 Hike Expected At July FOMC Meeting)

Now that I know that the US is building a railroad from the Pacific Coast to the Indian Ocean (according to Resident Joe Negan), I feel so much better. /sarc

On the other hand, The Philadelphia Fed’s Business Outlook index for June fell to -13.7.

On the positive side, retail sales surprised to the upside which would ordinarily trigger more rate hikes from The Fed. +0,3% MoM in May versus -0.2% MoM expected.

Now Fed Funds Futures are pointing to a rate hike at the July FOMC meeting.

Of course, Biden just had his primary opponent in the 2024 Presidential election and charged with document mishandling.

US Mortgage Rates UP 144% Under Biden’s Reign Of Error (Fed Likely To Pause Today But Raise Rates At July Meeting)

Biden’s “reign of error” is horrific. The inflation caused by Biden’s policies, The Federal Reserve and insane Federal spending has caused mortgage rates to soar 144% since Biden took office.

While The Fed is likely to pause today, but Fed Funds are pricing in a July rate hike.

Banks are not going to like another rate hike!!!

Biden’s Mortgage Market! Mortgage Demand Rises 7.2% In Latest MBA Mortgage Application Print, But Still Purchase Demand Still Down 27% YoY And Refi Demand Down 41% YoY

The Fed will annouce a pause at today’s FOMC meeting, so don’t look for mortgage rates to do much today.

Mortgage applications increased 7.2 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending June 9, 2023.

The Market Composite Index, a measure of mortgage loan application volume, increased 7.2 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 18 percent compared with the previous week. The Refinance Index increased 6 percent from the previous week and was 41 percent lower than the same week one year ago. The seasonally adjusted Purchase Index increased 8 percent from one week earlier. The unadjusted Purchase Index increased 17 percent compared with the previous week and was 27 percent lower than the same week one year ago.

Mortgage rates declined for the second straight week, with the 30-year fixed rate decreasing to 6.77 percent. Mortgage applications were up over the week, but remained well below levels from a year ago.

Joe Biden’s new nickname is “The 5 Million Dollar Bribe Man.” Sort of like Steve Austin.

Bidenville! US Inflation Cools To 2x Target In May, 26 Straight Months Of Negative Weekly Wage Growth (Core Inflation Still At 5.3% YoY, Yet Fed Will Pause Rate Hikes)

Okay, Joe Biden was generally regarded as the dumbest member of the US Senate and mean-spirited (I won’t repeat podcaster Joe Rogan’s opinion of Biden). Now we realize how brazenly corrupt Biden is (taking bribes from China and Ukraine to influence American poliicies). Not only is Biden an attrocious human being, but his policies have damaged the US middle class terribly thanks to inflation.

Yes, inflation is slowing, Inflation (CPI YoY) slowed to 4% in May, twice The Fed’s target rate of inflation. And core inflation is still raging at 5.3% YoY.

Real weekly wage growth is -0.7% YoY, the 26th straight month of negative wage growth. Great job Biden, Fed and Congress! … NOT!

Rent inflation remains persistently high at 8%, but The Fed is not interested in the suffering of the middle class.

Here is Theo Von’s podcast on Biden.

US Food Prices Are Still Up 8.2% Online (Rent Is Up 8.1% YoY As Americans Pay A Stiff Inflation Tax For Biden/Congress Spending Spree And Fed’s Monetary Stimulypto)

Tomorrow is the Federal government’s inflation report. As it stands today, overall inflation is slowing as M2 Money growth crashed. Core inflation remains persisitently high (white line), rent is still getting worse (orange dotted line at 8.1% YoY. What about food? Online food prices are up 8.2% YoY.

Shopping online is a good place to find cheaper computers and appliances, but grocery prices are still rising at a fast clip.

Prices of consumer goods sold online fell 2.3% in May in the US, the ninth consecutive month of declines and the biggest drop since the pandemic started, according to data from Adobe Inc. That was mainly due to steep decreases in discretionary categories.

Essential items like food, pet products and personal care, however, are seeing persistent inflation. Online grocery prices increased 8.2% from last year — although the pace of inflation has been abating since peaking at 14.3% last September.

Americans have been shifting more of their discretionary purchases to services over the past year, cutting spending on items for the home.

Online prices for appliances were down 7.9% in May from last year, the largest drop in digital-prices data from Adobe going back to 2014. Online prices for computers slumped 16.5% and electronics were down 12%.

The Adobe Digital Price Index was developed with the help of Austan Goolsbee before he became president of the Federal Reserve Bank of Chicago this year. The gauge analyzes one trillion visits to retail sites and more than 100 million items to track price changes.

Yes, Biden and Congress have levied a devastating tax on Americans. Rent and food are two of the largest household expenditures and they are up 8.1-8.,2% YoY.

Foul Powell On The Prowl! Fed Is Set to Pause and Assess the Effect of Rate Hikes, Bull Market Ahead! (US Inflation Seen Staying Elevated)

Foul Powell on the Prowl!

Federal Reserve policymakers are about to take their first break from an interest-rate hiking campaign that started 15 months ago, even as they confront a resilient US economy and persistent inflation.

The Federal Open Market Committee on Wednesday is expected to maintain its benchmark lending rate at the 5%-5.25% range, marking the first skip after 10 consecutive increases going back to March of last year. While officials’ efforts have helped to reduce price pressures in the US economy, inflation remains well above their goal.

Source: Bureau of Labor Statistics, Bloomberg

Investors’ focus will be on the Fed’s quarterly dot plot in its Summary of Economic Projections, which is expected to show the policy benchmark rate at 5.1% at the end of 2023.

By contrast, markets are pricing in the possibility of a quarter-point hike in July followed by a similar-sized cut by December, and some Fed policymakers have emphasized that a pause in the hiking cycle shouldn’t be seen as the final increase.

Fed Chair Jerome Powell, who’ll hold a press conference after the meeting, has suggested he favors a break from hiking to assess the impact both of past moves and of recent banking failures on credit conditions and the economy. His commentary will be scrutinized for hints of the committee.

Remember, there is still over $8 TRILLION in Fed assets held sloshing around the economy. The Fed never really removed the excess liquidity and it continues to stoke asset bubbles.

Bear in mind that The Fed is pausing at 5.25% Fed Target Rate, while the Taylor Rule suggests rate hikes to 10.12%. So, Foul Powell is pausing at just over the half way mark.

Of course, Biden’s and Congress’ massive spending spree is causing inflation, and The Fed has no control over Biden/Congress irresponsible spending.

Category: Existing Home Sales