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Thread: accurate leading indicator - Chicago Puchasing Manager's Index

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    Default accurate leading indicator - Chicago Puchasing Manager's Index

    ... the PMI is usually a very accurate indicator of things to come because A. the data is gathered directly from industry purchasing managers as opposed to gov't agencies, and B. the data crunching is kept to simple arithmetic without 'hedontic adjustments' or 'seasonal adjustments' or 'birth-death model adjustments' or any of the other gov't sleight of hand that affects gov't indexes.

    Also, the PMI is a 'leading' indicator since it takes a while for higher manufacturer's input costs to translate into higher retail prices, for falling orders / shrinking backlog to translate into additional layoffs etc.


    (snip)"Gee, I thought the economy was improving?

    SEPT CHICAGO PURCHASING MANAGERS INDEX: 46.1 [actual] Vs 52 [expected by the experts] - [with 50 being neutral - sic]
    **sub-indices:
    - Prices Paid: 51.3 v 50.0 last
    - New Orders: 46.3 v 52.5 last
    - Employment: 38.8 v 38.7 last
    - Inventories: 38.9 v 27.5 last
    - Supplier Deliveries: 49.3 v 54.6 last
    - Production: 47.2 v 52.9 last
    - Order Backlogs: 36.7 v 45.8 last

    Let's see.... besides the topline miss, we have prices paid up (bad), new orders down (bad), employment up 0.1% (marginally better to flat), inventories up (bad if you're not selling 'em!), supplier deliveries down (bad), production down (bad) and order backlogs collapsing (really bad.)

    I know it probably gets old, but I told 'ya you were smoking 'dem "green shoots"!

    (Still bullish are 'ya?)"(snip)

    from

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    Banned Eric Stoner's Avatar
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    Default Re: accurate leading indicator - Chicago Puchasing Manager's Index

    Quote Originally Posted by Melonie View Post
    ... the PMI is usually a very accurate indicator of things to come because A. the data is gathered directly from industry purchasing managers as opposed to gov't agencies, and B. the data crunching is kept to simple arithmetic without 'hedontic adjustments' or 'seasonal adjustments' or 'birth-death model adjustments' or any of the other gov't sleight of hand that affects gov't indexes.

    Also, the PMI is a 'leading' indicator since it takes a while for higher manufacturer's input costs to translate into higher retail prices, for falling orders / shrinking backlog to translate into additional layoffs etc.


    (snip)"Gee, I thought the economy was improving?

    SEPT CHICAGO PURCHASING MANAGERS INDEX: 46.1 [actual] Vs 52 [expected by the experts] - [with 50 being neutral - sic]
    **sub-indices:
    - Prices Paid: 51.3 v 50.0 last
    - New Orders: 46.3 v 52.5 last
    - Employment: 38.8 v 38.7 last
    - Inventories: 38.9 v 27.5 last
    - Supplier Deliveries: 49.3 v 54.6 last
    - Production: 47.2 v 52.9 last
    - Order Backlogs: 36.7 v 45.8 last

    Let's see.... besides the topline miss, we have prices paid up (bad), new orders down (bad), employment up 0.1% (marginally better to flat), inventories up (bad if you're not selling 'em!), supplier deliveries down (bad), production down (bad) and order backlogs collapsing (really bad.)

    I know it probably gets old, but I told 'ya you were smoking 'dem "green shoots"!

    (Still bullish are 'ya?)"(snip)

    from http://www.market-ticker.org/archive...icago-PMI.html
    And new unemployment claims for September are UP !

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    Default Re: accurate leading indicator - Chicago Puchasing Manager's Index

    The numbers are going to be interesting tomorrow.

    I wonder what they will look like as they wind down Saturn.

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    Default Re: accurate leading indicator - Chicago Puchasing Manager's Index

    here's the latest US unemployment news ...



    (snip)"WASHINGTON (Reuters) - U.S. employers cut a deeper-than-expected 263,000 jobs in September, lifting the unemployment rate to 9.8 percent, according to a government report on Friday that fueled fears the weak labor market could undermine economic recovery.

    The Labor Department said the unemployment rate was the highest since June 1983 and payrolls had now dropped for 21 consecutive months.

    Analysts polled by Reuters had expected non-farm payrolls to drop 180,000 in September and the unemployment rate to rise to 9.8 percent from 9.7 percent the prior month. The poll was conducted before reports, including regional manufacturing surveys, showed some deterioration in employment measures.

    The government revised job losses for July and August to show 13,000 more jobs lost than previously reported. Preliminary annual benchmark revisions, released together with September's employment report showed that total non-farm payroll employment for March would have to be revised down about 824,000. (snip)

    Manufacturing employment fell by 51,000 in September, while construction industries payrolls dropped. The service-providing sector cut 147,000 workers in September, while goods-producing industries shed 116,000 positions.

    Education and health services added a mere 3,000 jobs, while government employment fell 53,000."(snip)

    Note the downward revisions in previous month gov't 'estimates'. Also note that the only growing employment sectors i.e. education and health services, are in fact funded by tax money in the majority of cases.

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    Default Re: accurate leading indicator - Chicago Puchasing Manager's Index

    By the middle of 2010, I think there are gonna be a lot of people who "ran out of time." That is, they will simply be cashed out, bankrupt, and possibly homeless. Best buy your pitchfork now.

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    Default Re: accurate leading indicator - Chicago Puchasing Manager's Index

    The rate of unemployment goes up and it goes down. This is the way of things. The sun will come up tomorrow, and there is no cause to despair. The United States of America will arise stronger than ever.

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    Default Re: accurate leading indicator - Chicago Puchasing Manager's Index

    Quote Originally Posted by hockeybobby View Post
    The rate of unemployment goes up and it goes down. This is the way of things. The sun will come up tomorrow, and there is no cause to despair. The United States of America will arise stronger than ever.
    Is that what they said in Constantinople? Sometimes things break and they don't come back together.

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    Default Re: accurate leading indicator - Chicago Puchasing Manager's Index

    ^^^ the point you are referring to is a 'paradigm shift' ... sometimes it's possible to adapt comfortably to such a shift, but sometimes it is not. And, arguably, the global 'arbitrage' in wage rates - in combination with high and rising North American 'employer' tax rates and benefit costs - is making it virtually impossible for unskilled and even semi-skilled North American workers to maintain employment in the private sector.

    Gov't subsidies to certain industries, gov't unemployment benefit extensions etc. all serve to 'take the edge off' the abruptness of this paradigm shift. However, as shown by most recent data, the positive effects of these subsidies and extensions are TEMPORARY. And at some point the gov't will be forced to stop borrowing from our children and grandchildren via the unending issuance of new T bonds and the unending printing of new money in order to fund these temporary measures which 'fall on their asses' as soon as the gov't subsidies / benefits are cut. And when that happens, a wide swath of unemployed North American unskilled and semi-skilled North American workers will simply not be able to find a job with a pay rate which can sustain the standard of living to which they have become accustomed - or the standard of living which will be provided to them by the gov't for sitting home and doing nothing ( but that's a topic for a different thread).

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