BEA 4th Quarter GDP 1st Estimate 0.7% Q&A: Why Did GDPNow...

BEA 4th Quarter GDP 1st Estimate 0.7% Q&A: Why Did GDPNow Rise After Durable Goods? When are Construction Revisions Coming? Nonfarm private employment grew 189,000 from October to November of 2007 on a seasonally adjusted basis, according to the ADP National Employment ReportTM. The estimated change in employment from September to October was revised up 13,000 to 119,000. November’s increase of 189,000 marked a further acceleration of nonfarm private employment. The three-month average change in employment for September through November was 123,000, up from 43,000 during the three-month period from July through September. The strength in employment during November was fairly broad-based. Even in manufacturing, construction, and financial services, sectors where employment has been under downward pressure, there are signs of accelerating employment. In the week ending Dec. 1, the advance figure for seasonally adjusted initial claims was 338,000, a decrease of 15,000 from the previous week's revised figure of 353,000. The 4-week moving average was 340,250, an increase of 4,750 from the previous week's revised average of 335,500. The week to week figures can be choppy, but the key fact is the 4-week moving average of claims is up from around 310,000+- a week a few months back to 340,000+ claims today. This most assuredly is not a sign of any strength. That is possible I suppose and one explanation could be a final buildout of commercial real estate is about to end with this being the final push. On a purely anecdotal basis, just 3 miles from me a new Wal-Mart (WMT) store went up last month. Two miles from me a new Walgreen (WAG) store opened last week. Is a similar situation happening across the country, where massive completion of stores and strip malls of all kinds are now hiring? This is hard to say, but if that is indeed the explanation then this is the last hurrah. Looking ahead Wal-Mart has recently cut the number of stores it is opening in the US next year on two occasions. LIBOR did not drop on the ADP release even as the stock market was cheering. Today, 1-month LIBOR dropped precisely 1 basis point to 5.24 and 3-month LIBOR is flat at 5.15. Throughout the entire rally, LIBOR has been either flat or rising. From my perch, I see a weakening economy. What am I paying attention to now? Credit card delinquencies and prime delinquencies. And I don't like what I see. Look for the Fed to move 50 But whether it's 25, 50, or 75, it is not going to help. The excesses of this 20 year credit boom worldwide are not going to be relieved by the same strategies that created the boom, nor will they be relieved by bureaucrats at the Treasury or in Congress attempting to dictate their will on the market with irresponsible price fixing tactics. The content on this site is provided as general information only and should not be taken as investment advice. All site content, including advertisements, shall not be construed as a recommendation to buy or sell any security or financial instrument, or to participate in any particular trading or investment strategy. The ideas expressed on this site are solely the opinions of the author(s) and do not necessarily represent the opinions of sponsors or firms affiliated with the author(s). The author may or may not have a position in any company or advertiser referenced above. Any action that you take as a result of information, analysis, or advertisement on this site is ultimately your responsibility. Consult your investment adviser before making any investment decisions.