August 2013

Flat Line Real Consumer Spending and Income for July 2013

The July personal income and outlays report shows no change in real consumer spending, which is really bad news for GDP.   Not adjusted for inflation consumer spending rose a scant 0.1%.  Real personal income isn't any better with no change for the month.  Personal income not adjusted for inflation rose 0.1%.

Anyway You Slice It Corporate Profits Bigger Share of Economic Pie

The BEA released corporate profits for Q2 2013 along with GDP.  Corporate profits after tax increased 2.6% from Q1 2014 to $1,830.4 billion.  Corporate profits after tax are also up 5.8% from a year ago.  Corporate profits as a percentage of GDP are at an all time high and after tax profit margins per unit are also soaring to the stratosphere.

Q2 2013 GDP Revised Upward to 2.5% on the June Trade Deficit Shrink

Q2 2013 real GDP was revised significantly upward to 2.5% from the 1.7% originally reported   The revision gain was almost all a reduction in the trade deficit as we predicted earlier.  The shrink in the trade deficit alone added 0.8 percentage points to Q2 GDP, a welcome change.  Unfortunately this is a fluke.

Nearly 40% of the Top Paid CEOs Bombed at Their Jobs

The Institute for Policy Studies has released a no holds barred report on CEO pay, culture.  Even the study title screams outrage, Executive Excess 2013: Bailed Out, Booted, and Busted.  Every year there is a list of the top 25 highest paid CEOs and over the past 20 years this list has included 500 executives.  Of those 500 who made the Wall Street Journal's top 25 highest paid Chief Executive Officer list, a whopping 38% were utter failures at their jobs.

Pending Home Sales Decline for Second Month in a Row

The National Association of Realtors Pending Home Sales declined by -1.3% in July.  This is the second month in a row where pending home sales have declined as June dropped by -0.4%  Pending home sales have increased 6.7% from a year ago.  Pending home sales are also back to November 2006 housing bubble year levels.

Case-Shiller Shows Home Prices Cooled Slightly in June 2013

The June 2013 S&P Case Shiller home price index shows a 12.1% price increase from a year ago for over 20 metropolitan housing markets and a 11.9% change for the top 10 housing markets from June 2012.  This is a slightly lower annual increase than last month  The national quarterly index increased 10.1% for the year.

Realtors Say Home Sales Spiked in July; Let’s Wait till August

In contrast to new home sales, which plunged in July, the National Association of Realtors (NAR) reported that existing home sales "spiked" in July, increasing at a seasonally adjusted 6.5% rate to an annual sales rate of 5.39 million homes, up from a 5.06 million pace in June, which was

New Home Sales Plunged 13.4%, Previous Months Revised Down

July 2013 New Residential Single Family Home Sales plunged -13.4% to 394,000 in annualized sales and April through June were significantly revised lower.  New Single Family Housing inventory is now a 5.2 month supply.  New single family home sales are now 6.8% above July 2012 levels, but this figure is well within the ±18.6% margin of error.

America's Outsourcers to be Reclassified as Manufacturers

Don't like the trade deficit, low GDP and the public outrage over the offshore outsourcing?  Change the accounting method to make it go away!  Such is the agenda of government statisticians it appears.  How they are going to incorporate statistical lies into national accounts is shocking.  Production location no longer matters, the thing that will count is ownership of the final product.