Chicago F_E_D National Activity Index

Also at 8:30 and more bad news for manufacturing...

Released On 9/24/2012 8:30:00 AM For Aug, 2012

Prior Actual Level -0.13  -0.87  3 Month Moving Average -0.21  -0.47  The prior month was revised to -0.12 with this month at a whopping -0.87 decline, this moves the 3 month moving average is also deep in contraction from a revised -0.26 in July to another whopping -0.47 in August! The moving average is now at the lowest level since June of last year. The devil is in the details... The production component, pressured by a drop in both industrial production and capacity utilization as we have been talking about a lot recently-no new hiring until they use the spare capacity-in fact more lay-offs are likely, fell to minus -0.58 in August from a slightly positive reading in July. Consumption & housing is at minus -0.23 which is slightly more negative than the prior month. Both the employment component and the sales/orders/inventories component are negatives in the month. Again, all of the problems in manufacturing summed up here, excess capacity utilization leading to lay-offs, sales dropping, inventories building in the warehouses which means they need to burn through those before firing up the capacity utilization, but not before they get new orders and sales. Another realistic and ugly look at manufacturing and this is just the US, last week the Euro-zone (particularly the once "Core nation" of France) and China showed their weakness-globally 80% of countries are in manufacturing contraction and the 16 largest economies all inmanufacturing contraction.