by Mish

Held down by flat readings throughout, July was surprisingly weak based on the national activity index which came in at minus 0.01 to indicate fractionally lower-than-normal growth in the month. July’s production component fell to minus 0.02 from plus 0.03 in June as manufacturing production dropped slightly; the employment component, at plus 0.09, was the strongest contributor in the month though down from 0.13 in June; the consumer & housing component fell 0.06 as permits fell back once again; and sales/orders/inventories sank to minus 0.01 from plus 0.06. Manufacturing production and housing permits once again undercut what was otherwise a solid month for the economy.
Recent History
July was a strong month for payroll growth and an especially solid one for retail sales, both of which are certain to give a lift to the national activity index. Housing permits, however, will be a key negative and are holding down the consensus, which calls for 0.22 vs June’s 0.13.


Regular readers know I went to Southern Illinois to see the eclipse. It was an amazing event, but compared to images I have seen of past events, this one would not rate high.


We did have a reasonably clear sky but the corona and length of the flares did not reach out far. I suspect there was simply too much moisture in the air, with little flare activity to begin with.

It took six hours to get there, ten to come home. It was the worst traffic jam I have ever seen.

I got up at 5 AM on three hours sleep, was at the eclipse site until 2:30 PM, and then it took 10 hours to get home. I am tired.

Back to my regular schedule sometime reasonably soon.

Mike “Mish” Shedlock

Curious Results: Hurricane Harvey Impacts National Activity, Not Dallas Region Activity

Those looking for further proof that the Fed regional activity reports are totally bogus can find it in a pair of Fed economic reports today.

Chicago PMI in Steep Contraction Plunging to Worst Reading in 4.5 Years

The Chicago PMI went into contraction last month and took a dive to 44.4 in July. Readings below 50 are negative.

No Significant Price Pressures: PPI Underperforms Economists’ Expectations

The Producer Price Index (PPI) for final demand rose .2% in August vs an Econoday consensus expectation of 0.3%. Excluding food and energy, the PPI rose 0.1% vs an expectation of 0.2%.

Wild Miss in Expected Jobs: Economists Blame the Weather

Today’s employment report shows a wild miss in the expected number of jobs. The Econoday consensus estimate was 175,000 and ADP expected 263,000.

Cass Truck Transportation Index in Freefall

The Cass Truckload Linehaul Index is down for the third consecutive month.

The Way Chicago “Works”: Graft, Corruption, Political Connections, Bribes, Unions

Those who wish to understand how things work in Chicago need read a single article that ties everything together: Teamsters boss indicted on charges of extorting $100,000 from a local business.

Inflationistas Disappointed: Producer Price Index Flat, Services +0.3%, goods -0.5%

Those rooting for higher inflation were not happy with today’s PPI report that shows producer prices flat for the month vs an Econoday consensus of a 0.1 percent rise.

Pending Home Sales Down Again: NAR Blames “Staggering Lack of Inventory”

The pending home sales index for July dropped 0.8 percent vs an Econoday expected gain of 0.4%.

Philly Fed, Another Strong Regional Activity Report: Why Doesn’t Factory Data Match?

The Philadelphia Fed Business Outlook Survey of manufacturing activity has been in positive territory for eight months. New orders are up, unfilled orders are up, Employment is up, and work hours are up.