Gallup Daily Jobs Survey, Cass Freight Index, Rapidly-Rising Gasoline Prices Suggest More Economic Stagnation Ahead

Gallup.com polls Americans every day except some holidays.  It makes the summary data available continuously on its website.  Because there are no revisions (I think), and because there are no seasonal adjustments, I go to it often.

One of the two data points that I track regularly is what it asks people about their employer's hiring pattern.  They ask if the company is more on a net hiring path, net firing, or neutral.  The result is expressed as net hiring minus net firing.  Even during the early months of the Great Recession, when unemployment rates were rising, the result was in the +20-+30 range.  Those dates are dropping off of the five-year chart, but can still be seen (LINK).

Because the linked graph has a cursor, I cannot figure out a way to cut and paste it.  Please click through to the site.  The hiring-not hiring (or, firing) is not weighted for company size.  Still, it appears to track with the vigor of the recovery, and before that with the force of the downturn.

From February last year through to Feb. this year, the number has stayed steady at about +15.  In 2008, that level was associated with a strengthening recession.  The trend is almost stable for the past two years, whereas from 2009 (trough) through 2011, there was a modest but definite improving trend.

Who knows, but my guess is that the Fed initiated QE3 in its various incarnations not because it is reckless per se, but because it looked at detailed employment data trends that suggested stagnation.  This of course despite (because?) massive Federal deficit spending and massive monetary stimulation as well.

Other data supports the idea of a real slowdown in the U.S. economy.  Cass Freight shipments reports (LINK):

January shipment volumes fell off 4.8 percent from December and were 2.5 percent lower than they were a year ago. For each of the last two years, freight shipment volumes ended the year at about the same place they began. This was the first year since the recession period that January shipments were actually lower than January of the previous year.

The entire text, at least the introductory part, is useful.  It beats the Dow Jones Transportation Index, I believe.

What I think is really happening is the classic one.  As gasoline prices increase, and they are increasing rapidly, economic activity decelerates and if already flat-lining, heads downward.  The problems noted as Wal-Mart recently, at least per leaked internal e-mails, may have substance behind them.  As the Cass discussion mentions, at least a mild degree of inventory liquidation may be going on.

The bond bull may not be finished yet.

Vortex

Markets worldwide continue to reflect one record after another. The records are bad. They involve consumption and manufacturing alike. Perhaps it's time to read Spengler's Decline of the West.

In "Weakness Unmatched In 35 Years", the Liscio Report (found on John Mauldin's letter to subscribers (free)) shows that sales tax receipts were recently down 12% year on year, vastly exceeding the prior record, going back about 50 years.
Auto sales hit a new record low per capita. Perhaps most shocking is the savings data. Recently, all or more than all growth in income in America was spent. Recently, that is, until very recently. This "Marginal Propensity to Consume has ranged from, say, 60% to 140%. It recently hit 2%.

An alert reader (what other kind is there) sent me a graph of the Dow Jones transportation index. A multi-year trend line with support at 2883 was decisively broken today with a 5% drop to 2804. In addition, an ultra-long moving average, the 200-month ma of this indexis around 2930. If the monthly close is below that number, that would be reminiscent of the 1970 break, which foreshadowed bad times in the real economy and the stock market until the 1982 bottom.
The prior time the 200-month ma was taken out was 1930.

In contrast, the Dow Jones Industrial Average has been below its 200-month ma for some time.
This is therefore "confirmation" by the Transports.

As discussed here recently, the safe havens of gold and Treasuries can "catch a bid". Little else does so. All this is despite frenetic global attempts to create "liquidity". This liquidity is apparently going to shore up vital financial and other insolvent or near-insolvent institutions. In this environment, the real economy needs to simply survive. The authorities are not really expecting growth. Russia and now Brazil are succumbing to the global downturn. Perhaps India and China can resist this force.

For now, little else can.