General: GDP growth in Q3 almost came to a complete halt and it is expected that revised figures will actually show a negative growth and thus signal the beginning of the long talked about recession. There is no good news. Housing sales rose in September but about a third of those sales was based on foreclosures. Housing prices are still falling. The consumer confidence index has hit an all time low and the Purchasing Managers' Index has fallen to its lowest level since 1982. In the meantime, the US car industry is teetering on the brink of total collapse. After announcing staggering losses in Q3 Ford and GM ($129 million and $1.2 billion respectively) are drawing closer to the day when they will be out of funds. The incoming Obama administration has signaled that the US car manufacturers will be placed under the $700 billion bailout package. President-elect Obama will have a rough start of his tenure because of the abysmal economic conditions. The last time when things were this bad was when another President Bush (the elder) was voted out of office.
GDP: +0.3% in Q3 over Q2 as per preliminary figures, +0.8% for the past twelve months
Consumer Prices: +4.9% at the end of September for the past twelve months, no change from August
Consumer Confidence: 38.0 in October - down from 61.4 in September
Industrial Production: -2.8% in September compared to August, - 4.5% for the past 12 months
Producer Prices: -0.4% in September over October, +8.7% for past 12 months
Unemployment: 6.5% in October. Some 240,000 more jobs were lost in October. In the first ten months of 2008 1.2 million jobs were shed.
Trade Deficit: $59.1 bn in August (down from $61.3 bn in July) and $848.0 bn at end-August for the past twelve months.
Housing: Housing starts in September fell to a seasonally adjusted annual rate of 817,000 units. This is 6.3% below August and 31.1% below last year. Housing permits in September fell 8.3% to a seasonally adjusted annual rate of 786,000 units. This is 38.4% below September 2007. Existing home sales in September increased to a seasonally adjusted annual rate of 5.18 million units. This is 5.5% above August and 1.47% above September 2007. At the current sales rate the inventory of unsold homes translates into 9.9 months, down from a 10.6 month supply in August. The median home price in August was $191,600, down 9.0% from a year ago.
Automotive Industry: 737,645 units were produced in September or 11.2% less than last year. In the first nine months of the year 6,885,792 units were produced or 15.9% less than last year. In October total sales of light vehicles declined 31.9%. General Motors' sales went down 45.4%, Ford's 29.2% and Chrysler's 34.9%. Even foreign car manufacturers are not immune to the weak market conditions. Toyota's sales fell 29.0% and Honda's 25.1%.
Steel Production: 7.9 million metric tons in September or 1.3% less than last year. In the first nine months of 2008 76.0 million mt were produced or 4.0% ahead of last year.
Purchasing Managers' Index: According to the Institute for Supply Management the PMI fell to 38.9 in October from 43.5 in September. It is the third consecutive month of contraction and the pace is faster.
Other data in that report were as follows:
New Orders: 32.2 (38.8 in September) - trend is "contracting"
Production: 34.1 (40.8) - "contracting"
Inventories: 44.3 (43.4) - "contracting"
Customers' Inventories: 55.0 (53.5) - "too high"
Backlog Orders: 29.5 (35.0) - "contracting"
Manufacturing Sector: "contracting faster"
Overall Economy: "contracting" (the first month after 83 consecutive months of growth)
Currency: US$1 = Euro 0.77 as of November 5 (0.68 a year ago)