Aggregator • MaxedOutMama • ID=55619
Power production in India is improving, and rail traffic for the two first weeks of June is improving. Other than that, all the reports are quite disappointing.
This year rail and trucking freight have been highly correlated, so the rail reports are very encouraging.
Retail still looks dismal and declining. It's going to be a challenge to get off the floor with consumers apparently retracting. One heck of a challenge.
Philly Fed (pdf) show continued declines, but at a much slower pace. The striking month to month increase in the current index was offset by the dour comment that this is the best since Sept 08, when the index turned positive - right before the cliff dive began.
Overall, the best one can hope for is a few positive months of GDP late in the year, but it is hard to see how we can achieve escape velocity without some stronger consumer spending when capacity utilization is so low. In the US, utility outputs dropped 3.4% from May to May. This is pretty comparable to China's and Germany's figures, which makes me utterly discount the Chinese growth meme.
However, India's 6.9% increase in electricity output is encouraging.
The fact that the cliff-diving is over for the nonce doesn't mean that growth automatically resumes. There are very different forces at work in this recession compared to normal recessions. Demographics, high debt, and a very widespread asset bubble have to be included in the calculation. Right now on the manufacturing the best guess for the rest of 2009 is more of the bottom leg of an L than a decisive upward trajectory. We haven't reached the bottom yet either.