Our Economy Is In Big Trouble: Business Sales Is Slowing At An Increasing  Rate, US Consumer Makes, Spends Less In October, Real Income Falls For Third  Month, And Deflation Started in Europe Will Soon To Overtake The US

CHICAGO PMI RISES TO 50.4 — But Huge Drop In New Orders from Chicago PMI:

Employment 55.2 vs. 50.35 prior. New orders 45.3 vs. 50.6 prior. Prices paid  70.1 vs. 59.3 prior. Inventories 47.1 vs. 49.6 prior. Supplier deliveries 57.3  vs. 50.4 prior.

Big  jumps in supplier delivery times, employment, and prices look to be behind  the improved headline read in the Chicago PMI, but the gauge’s best leading  indicator – new orders – took a big hit, falling to 45.3 from 50.6, the lowest  level since June 2009. “Business  sales (have) been slowing throughout the year, and continue to slow, but now at  an increasing rate; becoming very alarming.” (full report)

US Consumer Makes, Spends Less In October, Real Income Falls For  Third Month

from Zerohedge:

It was only appropriate that on a day in which our chart of the day confirmed  that the US consumer is getting increasingly more broke, we got an update of  Personal Income and Personal Spending, both of which missed expectations and  declined substantially. October income printed at 0.0%, down from 0.4% in  September, and below expectations of 0.2%, while spending plunged from 0.8% all  the way into negative territory at -0.2%, missing expectations of an unchanged  print. Counterintuitively, the spin is that this miss was due to Sandy, when  this makes absolutely zero sense: as a  reminder Sandy only hit in the last 4 days of October, which means it had no  time to impact income, and if anything it prompted  an increase in spending as consumers stockpiled ahead  of the landfall. But that’s why they call it spin. Of course, none of this  should come as a surprise: the implied savings rate in September hit a  multi-year low of 3.3%, which means going forward the blend of spending and  savings will be unpleasant for stocks as consumers have no choice but to rebuild  savings once more. And finally, the most disturbing metric, and one which is a  red flashing light for all those predicting yet another economic renaissance in  2013, is that real Disposable Income declined by 0.1%: the third  decrease in 3 months, confirming that on an inflation adjusted basis the  consumer peaked in the summer, and it is all downhill from here.

Personal Savings: finally a modest uptick

Consumer  Spending Stumbled in October as Income Stalled

The Strongest Area Of The Economy Has Been The US Consumer — And  Three Recent Signs Don’t Look Good

from businessinsider:

One of the big themes of the year has been the split between nervous  corporates and confident consumer, with the latter holding up the economy.

But a few datapoints point to some weakness there.

Millan Mulraine of TD Securities describes today’s Personal Income &  Spending report:

Consumer spending activity declined for the first time since May, posting an  unexpected 0.2% m/m drop after rising briskly in the previous three months. Real  spending was also quite weak, declining by 0.3% m/m, marking the biggest decline  in this indicator in some time. And despite the very strong hand-off from  September, the weak performance in October suggests that consumer spending  activity is unlikely to provide any meaningful boost to economic activity in  Q4.

The internals of the report were largely weak, with spending on durable (down  0.8% m/m) and nondurable (down 0.2% m/m) goods both lower on the month. The  weakness in spending on goods was partially offset by higher expenditures on  services, which rose by 0.1% m/m, though this is a marked slowdown from the 0.3%  m/m gain in September. On the inflation front, there were quite encouraging news  for the Fed, as the pace of core PCE inflation remained relatively contained at  0.1% m/m following a similar performance the month before. Annually, the pace of  core inflation remained unchanged at 1.6% y/y, underscoring the relatively  favorable backdrop for the Fed’s accommodative monetary policy  stance.

What  Happens in Europe Will Not Stay in Europe: In 1929,  Deflation Started in Europe Before Overtaking the U.S.

from marketoracle.co.uk:

What Happens in Europe Will Not Stay in  Europe

More than 1,500 years after the fact, scholars still debate the causes of the  Roman Empire’s fall.

What historians do agree on is that the crumbling  empire’s final days were marked by economic contraction, a struggle to fund  Rome’s routine affairs and excessive debt.

Sound familiar?

Mark Twain said, “History doesn’t repeat itself, but it does rhyme.”

That quote seems to apply when economically comparing the Roman Empire and  the United States.

Today’s superpower also faces a mountain of debt and a slow economy.

Unlike then, however, the modern economy is global.

So an economic downturn in one major area of the globe is likely to affect  another. In fact, even during the Great Depression (long before the phrase “global economy”), Europe was exporting to America.

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