Gartman Recaps US Economic Data
May 4, 2016
Dennis Gartman is editor and publisher of The Gartman Letter, and strategic advisor of the AdvisorShares Gartman Currency Hedged Gold ETFs (GEUR & GYEN). He regularly contributes to AlphaBaskets and lends his institutional insight to educate advisors and investors about commodities and the forex markets, including about trading gold in different currency terms.
Turning then to the economic news of the day, from Friday of last week the news here in the States was mixed. Regarding Personal Income and Expenditures, income rose pleasantly… rising 0.4% month-on-month but only after a modest 0.1% downward revision in the previous month’s gains…but spending was weaker than had been hoped for as spending rose 0.1% month-on-month compared to the 0.2% increase that the Street had been calling for. Somewhat dismaying for the Fed, however, was the report that the PCE Price Index for the year rose 0.8%, down from the 1.0% rise in the index the month previous.
The Employment Cost Index rose 0.6% for the quarter and this was spot-on as had been expected, although the previous quarter’s 0.6% rise was cut back to a 0.5% increase instead. Wages are rising; benefits are also, but at a lesser pace. Perhaps the most worrisome report on Friday was the Chicago Purchasing Manager’s Report for April which was previously 54 (rounded as always to the nearest whole number) and which was expected to be down a bit but still nicely above 50, with the consensus looking for something close to 53. It was indeed above 50, but only barely: 50.4 to be precise, which we round to 50. Since February of last year, this index has been bouncing either side of 50 having been as low as 47 last February and as high as 55 in January. It is worrisome, however, that since peaking at 65 back in the spring of ’14 the trend does seem to be lower and that certainly has our interest. Finally on Friday, the University of Michigan’s Consumer Confidence report was also a bit dismaying for having been 90 in March and with most of those who forecast such things looking for a small rise it instead fell slightly to 89. Again, just as the Chicago PMI index peaked in the spring of ’14, Consumer Confidence seems to have peaked in very early ’15 at or near 97.