Less bad news?

January 2009 sales of merchant wholesalers, except manufacturers’ sales branches and offices were $326.1 billion, down 2.9 percent over the month. Wholesale inventories were down 0.7 percent. The inventory-sales ratio rose to 1.30. While the sales decline was less precipitous than last month’s, the news here is still bad.

February 2009 retail sales were down 0.1 percent. Declines were seen almost entirely in the automotive sector, with very small declines in a few other sectors. The important “general merchandise” category saw a small increase. Although the retailers almost scored a second consecutive increase, the report is in the bad news column.

In January, the combined value of distributive trade sales and manufacturers’ shipments were down 1 percent. Inventories declined by a roughly similar amount, thus the inventory-sales ratio remained at 1.43 This report summarizes and restates the bad news we heard last month as the individual underlying data were released.

The goods-and services international trade deficit was $36.0 billion in January, down from $39.9 billion in December. January exports were $7.6 billion less than December exports of $132.5 billion. January imports were $11.5 billion less than December imports of $172.4 billion. While you don’t like to have good news come in through the back door, this report is good news for domestic product; at worst, this should be considered a neutral report.

The U.S. Import Price Index edged down 0.2 percent in February. Declining nonpetroleum prices more than offset an upturn in petroleum prices. Export prices also recorded a modest decrease in February, falling 0.1 percent. While the good news of relative price stability at the top side of this report is tempered somewhat by the split between oil and non-oil imports, good news is good news.

Thus far in March, good news has accounted for about 31 percent of the statistical output from the system of Principal Federal Economic Indicators. I don’t expect this diffusion index to stay above 30 through the end of the month, but it has crept up a bit from January and February.