The economic slope is still slippery

Bad news outweighed the good this week as the economy struggles to find traction. While the quantitative measure of good versus bad news continues to be well below the break-even point (35.7 percent), the anecdotal and qualitative information in the Fed’s Beige Book was interpreted as portending a more stable situation: “However, five of the twelve Districts noted a moderation in the pace of decline, and several saw signs that activity in some sectors was stabilizing at a low level.”

U.S. retail and food service sales for March totaled $344.4 billion, a decrease of 1.1 percent from the previous month. (Bad news, although pretty much concentrated in the automotive and gasoline segments.)

U.S. total business sales for February were $994.9 billion, up 0.2 percent from January. Month-end inventories were $1,421.3 billion, down 1.3 percent over the month. (Good news, although entirely in the trade divisions.)

The Producer Price Index for Finished Goods decreased 1.2 percent in March. At the earlier stages of processing, prices received by producers of intermediate goods fell 1.5 percent and the crude goods index declined 0.3 percent. (Tough call, but this much price weakness is not good news, it is deflationarily bad.)

Industrial production fell 1.5 percent in March after a similar decrease in February. For the first quarter as a whole, output dropped at an annual rate of 20.0 percent, the largest quarterly decrease of the current contraction. (Bad news and promises more bad news for other production measures, such as GDP, in the first quarter.)

On a seasonally adjusted basis, the CPI-U decreased 0.1 percent in March after rising 0.4 percent in February. The index for all items less food and energy increased 0.2 percent in March, the same increase as in February. (Good news—stable prices.)

Real average weekly earnings were about unchanged in March 2009. A 0.3 percent decrease in average weekly hours was offset by a 0.2 percent increase in average hourly earnings and a 0.1 percent decrease in the Consumer Price Index. (Neutral)

Privately-owned housing starts in March 2009 were at a seasonally adjusted annual rate of 510,000. This is 10.8 percent below the revised February 2009 estimate of 572,000. (Obviously bad news, although we should have been ready for it after last month’s upside spike.)