Market Moving Data, 6/20 - 6/24

I'm going to be on vacation all next week, so I obviously won't be providing any commentary on the market during that time.  Here's what you'll be looking at, while I'm watching TV and trying to keep my son from eating the dog's food.

 

Monday, June 20th

• There are no real reports due out this day.  You've got the 4-Week, 3-Month and 6-Month T-Bill auctions, and that's about it.

Tuesday, June 21st

• The FOMC Meeting starts today.
• Existing Home Sales are due out at 10 AM, Eastern.  The Street gets totally excited about this report, for the same reason they get all excited about New Home Sales and about Housing Starts:  the trickle-down.  Buying a home means mortgages, furniture, paint, appliances, repairs, and lots of other big- and small-ticket durable and non-durable goods.  The information is available from the National Association of Realtors Existing-Home Sales page.

Wednesday, June 22nd

• The FOMC Meeting Announcement happens at 12:30 PM Eastern.  There will be remarks, and interesting information, but everyone will be watching with baited breath for the decision about the Fed funds rate.  Econoday doesn't have an "official" prediction, but look for it to stay at 0% - 0.25%.  You'll be able to get the results pretty much anywhere, but I like to use the website of the Board of Governors of the Federal Reserve System, and specifically I like to look at the Meeting calendars, statements, and minutes page.  Click the Press Conference link for June 21-22, then on the new page click the FOMC Meeting Statement link.
• Chairman Bernanke will then have a press conference at 2:15 PM Eastern.  The Street will hang on his words, looking for any hints of what the future holds.  You can get the transcript at the same place you would get the FOMC Meeting Statement (above), but you want the Press Conference Transcript instead of the FOMC Meeting Statement.

Thursday, June 23rd

• Jobless Claims are out at 8:30 AM Eastern.  We have no "official" predictions as of yet, but look for them to be in the range of 400k to 430k, simply because that's where they have been coming in for a while now and I see no reason yet for that number to substantially diminish.  But you can check it yourself at the US Department of Labor's OPA News Releases page.  Look for the link that reads "ETA News Release: Unemployment Insurance Weekly Claims Report [06/23/2011]".
• New Home Sales come out at 10 AM.  See "Existing Home Sales" above for why the Street gets totally excited about this, because I don't feel like typing it all out again.  You can find the information on the US Census Bureau's New Residential Sales page.  Just look for the current press release.

Friday, June 24th

• Durable Goods Orders are out at 8:30 AM ET.  This report makes the Street excited because increasing numbers mean increasing factory productivity.  Increasing factory productivity means increased demand for manufactured goods (implying a growing economy and an improving GDP) and (hopefully) increased demand for employees.  Happy happy, joy joy.  And all of this potential, hopeful joy can be found at the US Census Bureau's Manufacturers' Shipments, Inventories, & Orders page.
• Last only because of alphabetical ordering comes Gross Domestic Product.  Also at 8:30 AM Eastern.  this month's release will be the final revision for Q1, so it will get attention paid to it.  You'll find the details at the GDP page of the Bureau of Economic Analysis.

Regional and State Employment and Unemployment (Monthly) News Release

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The latest Regional and State Employment and Unemployment news release (http://www.bls.gov/news.release/pdf/laus.pdf) was issued today by the Bureau of Labor Statistics. Highlights are below.
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In May, 24 states reported over-the-month unemployment rate decreases, 13 states and the District of Columbia had increases, and 13 had no change. Nonfarm payroll employment decreased in 27 states and the district, increased in 22, and was unchanged in 1 state.

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World News!

Belarus

• Protesting the economic crisis in the eastern European nation, around 1000 people gathered outside the main administration building in defiance of - stop me if this sounds familiar - orders issued under a State of Emergency banning any sort of protests.  President Alexander Lukashenko's response was to - and stop me if this part sounds familiar as well - suppress any further protests.

China

• The Liberation Army Daily, the official newspaper of the People's Liberation Army, has released a report warning that China's internet infrastructure is vulnerable to attack, and reviewing what they know of the Pentagon's efforts in cyber security and warfare.

Greece

• Two members of Greece's ruling socialist party stepped down in protest over the austerity package supported by Prime Minister George Papandreou, leaving it increasingly unclear that the Prime Minister will be able to form a cabinet and get the deal approved.

Libya

• Saif al-Islam, Muammar Gaddafi's son, has announced that Gaddafi is willing to hold elections and to step aside if he lost.  He also states that the elections could be held within three months, and international observers would be allowed to guarantee transparency.  "I have no doubt that the overwhelming majority of Libyans stand with my father and sees the rebels as fanatical Islamist fundamentalists, terrorists stirred up from abroad," he is quoted as saying.
• The British government has confirmed that, due to the EU travel ban, no members of the Libyan government will be allowed to attend the London 2012 Olympics.

North Korea Crazy

• Last week, a boat containing three men, two women and four children crossed the marine border between North and South Korea, looking to defect.  Now, Pyongyang is demanding their immediate repatriation through the offices of the North Korean version of the Red Cross.  So far, the refugees have expressed no desire to return to the land of Furry Hats of Power and starvation.

Syria

• The United Nations High Commissioner for Human Rights has released a report on the situation in Syria, itemizing the facts as they are currently known (using live ammunition on unarmed civilians, arbitrary arrests, torture, and executions, and so forth), and calling on the Syrian government to allow them entry to the nation to examine the situation for themselves.

United States

• LulzSec took down the CIA's public website yesterday, apparently in a Denial of Service attack.  At present, there is no confirmation whether the site was hacked as well.
• Citigroup announced that a cyber attack in May compromised 360,083 North American credit card accounts - nearly twice as many as originally reported.  The attackers obtained names, account numbers and contact information, but continues to insist that "data critical to commit fraud was not compromised".
• Vice President Biden and a committee of six lawmakers have set a July 1 goal to reach a debt-reduction agreement
• In "there is no joke I can think of that could possibly be construed as safe for work" news, Representative Anthony Weiner has announced that he is resigning his seat in the House of Representatives, for lying about what sending what could be called "junk" e-mails.
• Responding to Representative Boehner's warning that, without approval from Congress, the President would be in violation of the War Powers Act if US participation in Libya continued past Saturday, the President has delivered a 32-page response stating that the administration is acting with legal authority and urging lawmakers not to send "mixed messages".  The argument is that, since US military participation in Libya has been scaled back to a support role, it does not require congressional consent.
• Two days after the release of congressional report demonstrating that some 70% of firearms recovered from Mexican crime scenes and submitted for tracing came from the US[1], three BATF agents testified before the House Oversight Committee that they were ordered to seize weapons from traffickers along the Mexican border, but were told not to make arrests.

[1]  And which, for some reason, proposes restricting firearms imports into the United States as a solution.  No, it doesn't make any sense to me, either.

First Time Jobless Claims

Next on the agenda for market-moving news, we have unemployment insurance claims.

 

Last week, we had "mixed but bad" results.  The analysts had been calling for 418,000 new claims for 6/4, and we got 427,000 instead.  On the other hand, looking at the unadjusted numbers for the week, we had 364,507 claims (a decrease of 12,914).  The total number of people claiming benefits in all programs (for the week ending 5/21) fell to 7,601,344.  Which was nice, except for the fact that a little math worked out that only 2.69% of the 453,343 people who stopped claiming benefits in all programs actually got back to work.  That fact isn't nice at all.

 

But the Econoday-surveyed analysts, feeling optimistic, are calling for 420,000 initial claims for the week ending 6/11.  Are they right?  To find out, we turn now to - say it with me - the US Department of Labor's Unemployment Insurance Weekly Claims Report.  And, once there, we'll get the initial wave of euphoria from good news out of the way:  the 6/4 initial claims figures were adjusted upwards to 430,000, but the 6/11 seasonally adjusted initial claims figures come in at 414,000.  Yes, expectations have been beaten.

 

On the down side, the unadjusted number of new claims for 6/11 comes in at 394,910, an increase of 30,403.  That's not so good.  The total number of people claiming benefits in all programs for the week ending 5/28 comes in at 7,401,228, a decrease of 200,116.  But don't celebrate that figure yet:  I have math skills, and those math skills are about to rain on that parade.

 

The week ending 5/21 had 7,601,344 people claiming benefits in all programs.  The week ending 5/28 added 377,421 first time claimants to that number, but came in at a total of 7,401,228 total claimants in all programs at week end.  That means 7,601,344 + 377,421 - 7,401,228 = 577,537 people stopped claiming unemployment benefits in the week ending 5/28.

 

Now, we know from May's Employment Situation report that only 54,000 nonfarm jobs were created in May.  That works out to 1742 jobs per day, or 12,194 nonfarm jobs per week. In other words, only about 2.11% of the people that stopped claiming benefits in all programs did so because they got nonfarm work.  It is probably reasonable to assume that a far smaller percentage got farm work.  The rest?  Some probably went back to school, or became full-time homemakers, or something like that.  The majority, however, probably just ran out of benefits.

 

But, hey!  We beat expectations!

Housing Starts

First up on the market-movement agenda for today is Housing Starts, a monthly examination of how many new residential buildings have started construction.  The figures are given as an annualized rate, meaning we are looking at how many houses would be built in the space of one year if the current rate of construction were carried forward.

 

No, I don't know why it's calculated this way, rather than by just looking at the number of residential units (raw or seasonally adjusted) actually began construction during the month.  I'll put that on the list of things to go find out and share with you all.  One of these days.

 

Anyway, last month we had an annualized level of 523,000 (based on April figures).  In a statement that should surprise nobody, the Econoday-surveyed analysts are feeling optimistic, and are expecting the annualized construction level to rise to 547,000 for May.

 

Oops.  Before I forget, let's answer the burning question, shall we?  Why should we care?

 

We should care, because it's all about the trickle-down impact.  Ignore, for the moment, the fact that improving housing starts implies confidence in the construction industry, because builders rarely build unless they are confident it will sell - that's handy, but it's not why the Street cares.  Rising home construction brings with it rising construction employment;  at the end of the day, you need bodies hauling brick and lumber, driving nails, plumbing and wiring and painting and landscaping and so on and so forth, to build a house.  Then you need to outfit the house, and that's durable goods purchases:  stoves, refrigerators, washers, dryers, air conditioning units, furnaces, heat pumps, light fixtures, carpet, and a bunch of other things that I probably take for granted until they break.  Then, when the house sells, mortgages.

 

So the Street wants to see these numbers go up.  They really want to see these numbers go up.

 

To see if the Street gets what it wants, we turn to the joint US Census Bureau and Department of Housing and Urban Development New Residential Construction in May 2011 report.  This report tells us that the analysts were wrong, but in a good way.  May actually comes in with a seasonally adjusted annual rate of 560,000, blowing the expectations out of the water.  419,000 of those were for single-family housing.

 

In other interesting news, May saw a seasonally-adjusted annualized 612,000 building permits issued, substantially improved from April's 563,000 and implying that housing starts should continue to rise.  Also, a seasonally-adjusted annualized 544,000 residential buildings were completed in May.

 

So, that's some good news for the markets.  If the jobless claims follow suit, and if Greece doesn't collapse into a frenzy of debt-driven self-slaughter, and if we can get some good news about the debt ceiling, maybe the markets will do well today.

World News, In Which We Learn How Much Cash Fits In An Airplane

Canada

• Richard Gadden, director of the Canadian Security Intelligence Service, has warned that state-sponsored espionage against the country has reached "levels equal to, or greater than those witnessed during the Cold War."

Chile

• In "Gotterdammerung news", the ash cloud from the Puyehue-Cordon-Caulle volcano range has forced the cancellation of flights into and out of western Australia.  The eruptions started on June 4th, and are still going strong - and previous eruptions in the same range have lasted for as long as two months.

China

• Based on the country's policy of tightening credit, Standard & Poor's has downgraded its outlook for the Chinese property market from stable to negative.

France

• Citing concerns raised by Greek sovereign debt holdings and by credit extended to the Greek private sector, Moody's has placed France's top three banks (BNP Paribas, Societe Generale, and Credit Agricole) on review for a possible downgrade.

Greece

• Greeks are throwing a national strike to protest the current wave of austerity measures, attempting to pressure the Greek Parliament into taking none of the steps required for the nation to qualify for another round of bailout loans from the European Union and the IMF.

Libya

• Loyalist forces shelled rebel positions in the Western Mountains.  The reports, which come from the rebels, indicate that there were no casualties.
• Canada has recognized the rebel forces in Libya as the "legitimate representatives" of the Libyan people.

Pakistan

• In "no, we weren't sheltering Bin Laden, why would you think that?" news, Pakistan has arrested five alleged informants for the CIA on charges of having provided information that led to the raid that killed Osama bin Laden[1].  There are some reports that an army major is among those arrested, although the Pakistani government denies this.

Syria

• More "armed terror gangs" have sprung up, this time in Maarat al-Numaan.  What other reason would there possibly be for the Syrian government to send tanks and helecopters there to arrest hundreds of people?
• Now that the "armed terror gangs" and "militants" have been driven out of Jisr al-Shughour by tanks and helicopters, along with most of the populace (except for the "armed terror gang" members arrested with clubs), the Syrian government has called on the people of the town to return to their homes instead of fleeing to Turkey for sanctuary.

United States

• Speaker of the House John Boehner has warned President Obama that, if he fails to get congressional authorization for United States actions in Libya by Friday, he will be in violation of the War Powers Act.  "Since the mission began, the administration has provided tactical briefings to the House of Representatives, but the White House has systematically avoided requesting a formal authorization for its action," he states in a letter to the President.
• One C-130 Hercules cargo plane, with a cargo compartment roughly 41 feet by 9 feet by 10 feet, can carry $2.4 billion in shrink-wrapped bricks of $100 bills.  Why do I bring this up?  Well, 20 C-130s with this sort of cargo load were flown to Iraq by may 2004, to aid in reconstruction projects.  Seven years later, the Pentagon and the Iraqi government has wrapped up audits and investigations that have failed to account for 3 C-130s worth of $100 bills (or, if you just can't quire wrap your head around the C-130 scale, about $6.6 billion[2]).  The money is missing, presumed stolen, and nobody is particularly happy about it.
• Federal Reserve Chairman Ben Bernanke has advised the Congress that playing political games with the federal debt ceiling is a terrible idea.  "Failing to raise the debt limit would require the federal government to delay or renege on the payments for obligations already entered into," he said.  "Even a short suspension of payments on principal or interest on the treasury's debt obligations would cause severe disruptions in financial markets and the payments system."  His advice?  Come up with a credible long-range plan to reign in the budget deficit.
• In an unsuprising party-line decision, the Wisconsin Supreme Court has upheld a law stripping most public employees' collective bargaining rights.

[1]  Not to put too fine a point on it, the BBC states that "Our correspondent says that the Pakistani authorities appear to be making every effort to unearth CIA informants while showing little interest in arresting Taliban and al-Qaeda sympathizers."

[2]  To put it yet another way, enough money went missing to pay for the 2010 budget for the US Army Corps of Engineers, the Small Business Administration, and the General Services Administration.  Or to give everyone in the United States $21.18.

Industrial Production

This particular report is another one of those reports that is pretty much exactly what it sounds like.  It's an overview of the monthly change in factory production rates, and then a look at what percentage of our total (theoretical) production capacity the nation is using.  The report subdivides into industries and types of products as well, but most analysts like to look at the overall figures to see what the nation is doing as a whole.

 

The figures for April were a little sad, with a 0.0% increase in production and a 76.9% capacity utilization rate.  But, as is their way, the Econoday-surveyed analysts are expecting things to improve, calling for a 0.2% increase in May production and an increase in capacity utilization to 77.0%.

 

For the actual results, we turn to - no, not the Bureau of Labor Statistics.  No, we turn to the Federal Reserve for this one.  Their report is showing that the analysts were a little overoptimistic.  Industrial production did rise, but only by 0.1% for the month of May, with capacity utilization slipping to 76.7%.  Business equipment production rose 1.2%, helping to prop up a lackluster "final products" market group, and construction supplies production  rose 1.4%, helping to boost the nonindustrial supplies market group.  Utilities were the biggest drag on the report, with production falling 2.8%.

Consumer Price Index News Release

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The latest Consumer Price Index news release (http://www.bls.gov/news.release/pdf/cpi.pdf) was issued today by the Bureau of Labor Statistics. Highlights are below.
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On a seasonally adjusted basis, the CPI-U increased 0.2 percent in May after rising 0.4 percent in April. The index for all items less food and energy rose 0.3 percent in May after increasing 0.2 percent in April.

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Consumer Price Index

Yesterday, we had a look at production cost inflation (through the PPI).  Today, it's time to consult the CPI-U and see what, if anything, has passed on to consumers.

 

Last month, April's CPI-U was a mixed bag of results.  It increased 0.4%, which was right in line with expectations, while core CPI-U increased 0.2% (missing expectations).  We also saw the energy index rise 2.2% and the food index rise 0.4%.  Finally, for the rolling year, CPI-U had increased 3.2%.

 

This month, the Econoday-surveyed analysts are suffering from a bout of rampant optimism.  They're calling for a flat 0.0% change in CPI-U, and a 0.2% increase in CPI-U.  Are they right?

 

The short answer:  no.

 

The long answer comes from the Bureau of Labor Statistics' Consumer Price Index Summary, which shows a 0.2% increase in CPI-U for the month of May[1], and a 0.3% increase in core CPI-U.  Much of the increase is attributed to increased costs for clothing, shelter, new vehicles and recreation, which offset declines in costs for airline fare, tobacco, and personal care.  The food index increased 0.4%, but the energy index decreased 1.0%(!).

 

All of this puts CPI-U up 3.6% for the rolling year, core CPI-U up 1.5% for the rolling year, food CPI up 3.5%, and energy CPI up 21.5%.

 

[1]  Not too bad, really.  Although, technically, this means that we missed expectations by (infinity - 1)%.  Feel free to ask, if you really want to see the math.  But that's an amusing technicality in any event, because we really only missed expectations by 20 basis points..

Retail Sales

Retail Sales!  This is the report in which the US Census Bureau tells us about the changes in total receipts at stores that sell durable and nondurable goods - that is, goods you can touch, pick up, smell, eat, and so forth.  As opposed to intangible goods, which are actually services.  The Street likes this report because they like sales.  They like corporate revenues, they like seeing the economy working, and they like profits.

 

April was slightly disappointing, though.  Overall retail sales increased 0.5% (missing expectations), but ex-auto retail sales were up 0.6% (meeting expectations).  Gas stations had the best month, with a 2.7% increase in sales (helped by rising gasoline costs, since this is total receipts we're looking at), while sporting goods, hobby, book & music store sales had the worst month (with sales falling 1.9%).

 

So that was past.  In the present, the Econoday-surveyed analysts are expecting a soul-crushingly bad month[1], looking for overall sales to fall 0.3%, but for ex-auto retail sales to climb 0.3%.  So, obviously, they're expecting car sales to outright tank.  But are they right?  Let's turn to the Census Bureau's Advance Monthly Sales For Retail and Food Services May 2011 report and find out.

 

Actually, they're wrong.  But in a good way.  May brings us a 0.2% decline in overall retail sales, and a 0.3% increase in ex-auto retail sales.  So we beat expectations on the one and met expectations on the other.  Miscellaneous store retailers[2] had the best of the month, with a 2.1% increase in sales, while motor vehicle and parts dealers had the worst of the month (with a 2.9% decline in sales).

 

[1]  A little hyperbole is good for the soul, don't you think?

[2]  They really don't define "miscellaneous store retailers".  I'm assuming this covers any type of store that either isn't covered in the existing categories, or one that straddles the boundaries so well that you can't really say it belongs to one over the other.  Like a three-star restaurant that is also a lumber yard.

Producer Price Index

The Producer Price Index - PPI to its friends - is a Bureau of Labor Statistics index that tracks the change in manufacturing costs in the United States.  If PPI goes up, that implies rising inflation (although it doesn't always prove it, since bad economic conditions can make it difficult to pass production costs on to consumers[1]).  Analysts like neutral numbers here;  mild increases are tolerable, as are mild decreases.  Large jumps are likely to send everyone into a panic about "skyrocketing inflation" or "deflationary death spirals".

 

For what it's worth, last month demonstrated that "deflationary death spirals" are not on the agenda right now.  PPI for finished goods rose 0.8% in April (missing expectations), while core PPI for finished goods rose 0.3% (also missing expectations).  Interestingly enough, PPI for finished foods (the foods you buy in the grocery store, whether fresh or canned) rose 0.3%,driven by a 56.7% increase in the cost of eggs.  PPI for intermediate goods rose 1.3%, and PPI for crude goods rose 4.0%.

 

The Econoday-surveyed analysts are fairly confident that May will have better results.  They're calling for a 0.1% increase in PPI for finished goods, with core PPI for finished goods rising 0.2%.  And the question now is, are they right?

 

And the answer is, according to the BLS Producer Price Indexes - May 2011 release, not really.  Although they came close.  PPI for finished goods rose 0.2% in May, with the core PPI for finished goods also rising 0.2%.  PPI for finished food fell 1.4% (driven by a 12.2% decline in prices for fresh and dry vegetables) while PPI for finished energy rose 1.5% (driven by a 2.7% increase in gasoline prices).  PPI for intermediate goods rose 0.9%,and PPI for crude goods fell 4.1% (driven by a 4.7% decrease in the cost of copper).

 

So, yes, expectations were missed.  But, particularly with that massive decline in crude goods costs getting ready to work its way through the production cycle, I doubt anyone will mind all that much.

 

[1]  Well, it makes it difficult if you intend to sell those more expensive products.  Particularly if you produce luxury goods that consumers can do without when push comes to shove.

Producer Price Index News Release

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The latest Producer Price Index news release (http://www.bls.gov/news.release/pdf/ppi.pdf) was issued today by the Bureau of Labor Statistics. Highlights are below.
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The Producer Price Index for finished goods rose 0.2 percent in May, seasonally adjusted. This advance followed increases of 0.8 percent in April and 0.7 percent in March. The index for finished goods less foods and energy moved up 0.2 percent.

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NFIB Small Business Optimism Index

The NFIB is the National Federation of Independent Business, an organization that describes itself as "the leading small business association representing small and independent businesses.  A nonprofit, nonpartisan organization founded in 1943, NFIB represents the consensus views of its members in Washington and all 50 state capitals."

 

One thing that the NFIB does is survey its members on a monthly basis, checking their feelings about current and future economic conditions.  Are small businesses optimistic about the future?  Are they planning on hiring?  Do they plan to expand?

 

Interestingly enough, this report gets pretty much no traction whatsoever from analysts[1].  So why am I giving the data on it?  Well, according to the US Small Business Administration, small businesses

• Represent 99.7% of all employer firms
• Employ just over half of all private sector employees
• Pay 44% of total US private payroll
• Have generated 64% of net new jobs over the past 15 years
• Create more than half of thee nonfarm private gross domestic product
• Hire 40% of high tech workers
• Made up 97.3% of all identified exporters and produced 30.2% of the known export value in FY 2007
• Produce 13 times more patents per employee than large patenting firms

So they've got some impact on and influence over the general health of the economy.

 

Now, with all that in mind, let's turn to the NFIB press release "Consumer Spending Remains Weak:  Small Business Optimism Dips a Little Lower".  May marks the third consecutive month of falling small business optimism, with the Small Business Optimism Index dropping 3 points to a level of 90.9.  Employment growth is virtually 0, with only 13% of the businesses surveyed planning to increase hiring in the next three months.  Overall sales have fallen 9% over the last three months.

 

Not a great economic picture, particularly in light of the impact small businesses have on the economy.

 

[1]  Which, in fairness, makes sense.  Small businesses are the least likely to be publically traded, and analysts look at publically traded companies.  But it still seems short-sighted, if you're interested in the health of the economy.

What's Happening This Week?

Just a quick look into the future, so you know what to expect in the way of market-moving economic measures.

 

Tuesday brings us the NIFIB Small Business Optimism Index (aka "what sort of mood are half the employers in the United States in"), the  Producer Price Index (aka "What does it cost to make things") and Retail Sales (a quick look at the change in total receipts in stores that sell durable and/or non-durable goods[1]).

 

Wednesday brings us the MBA's Purchase Applications index (a look at the weekly change in the number of new and refinance mortgage applications), the Consumer Price Index ("inflation! Inflation! INFLATION!") and Industrial Production ("now that we know how much more it costs to make stuff, how much stuff are we making?").  Maybe the Empire State Manufacturing Survey ("what do New York manufacturers think about the current economy") and the Housing Market Index ("what kind of demand is there for housing"), depending on how busy I get.

 

Thursday brings us Housing Starts ("how many new homes did we start building"), Jobless Claims ("Yip yip yip yip yip yip, sha na na na na, get a job!  Sha na na na na, sha na na nanana na!") and the Philadelphia Fed Survey ("We're kind of like the Empire State survey, except that people care").

 

And Friday?  Consumer Sentiment and Leading Indicators.

 

So, it's a bit of a busy week.

 

[1]  I used to joke that, if you're including durable and non-durable goods, there's nothing left.  But, it turns out that there are also intangible goods.  Intangible goods are services, things you can't touch/see/eat, like accounting or higher mathematics.  Stuff that's kind of essential to the economy, but isn't really considered to things that are produced.