Data puree? Weak jobs report suggests manufacturing data are wrong

The markets have been celebrating a rise in factory orders reported by the Commerce Department, which was corroborated by the ISM report. That showed a substantial rise in back orders, but also a worrisome jump in prices.

But something is fishy about the numbers. Private sector jobs grew only 64,000 in April. But here’s the kicker (emphasis added):

After adding in some 24,000 government jobs created in a typical month, the ADP report suggests nonfarm payrolls grew by about 90,000 in April, a bit lower than the 100,000 estimated by economists surveyed by MarketWatch.

Service-sector firms added about 106,000 jobs, while the goods-producing industries cut 42,000, including 20,000 in manufacturing. Goods-producing industries include manufacturing, mining and construction.

Furthermore,

it is challenging to reconcile the message from the ISM manufacturing survey for April with other current economic data. Factory reports for April from Chicago, New York, Cincinnati, Milwaukee and Richmond show slowing momentum, while the report from Philadelphia suggested nearly unchanged conditions. Factory surveys from Kansas City and Detroit were the only two reports indicating an expansion in factory activity.

And we know that auto sales and home sales are tanking.

So, exactly what are we manufacturing more of, using fewer workers and with declining factory usage?

My guess is that all those new factory backorders are for excessively optimistic data.

Update: To further confuse the issue, initial jobless claims are down to 305,000 and the four week average is at 328,750. This is generally taken to mean a rise in employment. Still, the ADP report spoke of declining manufacturing employment, something one doesn’t expect if orders are pouring in. 

Mexico, May 2nd 2007

In the last week or so, some interesting developments.

First, Mexicans are not exactly thrilled about the privatization of Social Security that La Gordita has planned. If you were planning to travel from the DF to Cuernavaca, better bring a mule, because the highways are otherwise occupied.

(Image from El Universal)

The key one has to do with the economy.

No sooner had 2007 begun than Banco de Mexico’s board began to realize that its fairly benign view of inflation was running up against yet another supply shock, this time involving corn and tortilla prices…..

By February, Banco de Mexico began to realize that the surge at the beginning of the year was likely to keep headline inflation higher for longer. …

Another Case of Political Prosecution?

Former Macomb County (Michigan) Prosecutor Carl Marlinga wants to know whether the federal government’s unsuccessful prosecution of him on corruption charges was politically motivated.

U.S. Attorney Stephen Murphy, who prosecuted the case, says that politics were not a consideration. Of course he does. However:

Susan Kramer of Rochester Hills, one of four Marlinga jurors who were so impressed with his innocence they invited him to dinner after the trial, said the government’s case was so weak she does not know why it proceeded.
 

Kramer said she was disturbed to learn after the trial that the Marlinga investigation was prompted by complaints from Michigan Republican Party official Rusty Hills and U.S. Rep. Candice Miller, who at the time was Marlinga’s Republican opponent for a seat in Congress.

Candice Miller has close political ties to BushRove. I’m just sayin’.

Baghdad As Gulag

I watched a CBS report on the Evening News a few days ago on just how peachy the new walled ghettoization of Baghdad was going: “It’s cut down on the violence!” the reporter chirped.

“Cut down on the violence”? That depends on who you ask.

Pepe Escobar — who is one of the few Western reporters who has dared to go around the non-Green-Zoned sections of Baghdad in the last few months and lived to tell about it — has a somewhat different perspective.

The Face Of Evil

Salon.com contributor Peter Kurth lost a laptop while flying from New York to London, and made the mistake of harrassing airline personnel about it. For that crime, he was heaved into prison for five weeks, on the pretext of a nearly-expired (though still legal) passport, and raped nearly non-stop until he was finally freed.

But that’s not what’s evil.

What’s evil are the minds of people who think that this was perfectly OK and that he deserved to be raped and humiliated for five weeks for sassing back to a flight attendant over his lost $1000-plus laptop.  These people would be perfectly at home in Hitler’s Germany, Mussolini’s Italy, Stalin’s Russia, or Franco’s Spain.