A veritable blizzard of statistical reports leaves the good news index at 47.1 percent thus far in June. Are we closing in on the 50 mark which would indicate that the good-news—bad-news ratio had broken even? If taht turns out to be so, I’ll start quoting some of my remarks of early December 2008.
Manufacturing corporations' after-tax profits averaged 3.2 cents per dollar of sales for the first quarter of 2009, up 8.2 cents from the average after-tax losses of 4.9 cents for the fourth quarter of 2008. Good news.
Privately-owned housing starts in May 2009 were at a seasonally adjusted annual rate of 532,000. This is 17.2 percent above April 2009. Obviously good news, even if this series has been very volatile lately.
The PPI increased 0.2 percent in May. This rise followed a 0.3-percent advance in April and a 1.2-percent decrease in March. Prices for finished goods other than foods and energy decreased 0.1 percent after rising 0.1 percent in April. Hard to imagine a better over-the-month report than this right now.
The Import Price Index increased for the third consecutive month in May, rising 1.3 percent. An 8.3 percent increase in petroleum prices was the primary contributor. The Export Price Index rose 0.6 percent. These top-side numbers are way too big to be comfortable, so even the relative calm in the non-petroleum import and non-agricultural export numbers and the firm pricing in their industrial supplies and materials lines don’t serve to promote the report to “mixed.”
CPI-U rose 0.1 percent in May after being unchanged in April. The index for all items less food and energy increased 0.1 percent in May after increasing 0.3 percent in April. Price stability is good.
Real average weekly earnings fell by 0.3 percent from April to May 2009. Wage erosion is bad.
Industrial production decreased 1.1 percent in May after having fallen a downward-revised 0.7 percent in April. The rate of capacity utilization for total industry declined further in May to 68.3 percent. Production declines are bad, without question. (But might the turn in the profits picture indicate that production is becoming more gainfully aligned with demand?)
Wednesday, June 17, 2009
Friday, June 12, 2009
Mixed revenue reports
The good news index (GNI) now stands at 40 percent as good news on last month’s retail revenue was offset by a weak report on April’s business (manufacturing and trade) sales.
Retail and food service sales for May reached $340.0 billion, an increase of 0.5 percent from April. Despite the facts that the gain was not widely diffused and included a price-driven increase in gas stations’ sales, this is undeniably good news.
U.S. total business sales for March were $966.8 billion, down 0.3 percent from April. Month-end inventories were $1,384.7 billion, down 1.1 percent. Despite the facts that the decline was considerably less steep than the previous month’s and that the inventory-to-sales ratio edged further down, a decline in sales is always bad news.
Retail and food service sales for May reached $340.0 billion, an increase of 0.5 percent from April. Despite the facts that the gain was not widely diffused and included a price-driven increase in gas stations’ sales, this is undeniably good news.
U.S. total business sales for March were $966.8 billion, down 0.3 percent from April. Month-end inventories were $1,384.7 billion, down 1.1 percent. Despite the facts that the decline was considerably less steep than the previous month’s and that the inventory-to-sales ratio edged further down, a decline in sales is always bad news.
Wednesday, June 10, 2009
Bad news on trade and services
Bad news from the international trade and U.S. services releases has driven the good news index below 40. The GNI now stands at 37.5.
Foreign trade deteriorated on both the export and import accounts and the net was an increase in the deficit—a bad news trifecta from this release.
The quarterly services report was pretty poor as the Census Bureau emphasized for the information sector. Information sector revenue for the first quarter of 2009 was $275.3 billion, a decrease of 0.9 percent from the fourth quarter of 2008. Although this report is on the list of principal federal economic indicators, not included in our news index because its format is too disaggregated and difficult to summarize.
Foreign trade deteriorated on both the export and import accounts and the net was an increase in the deficit—a bad news trifecta from this release.
The quarterly services report was pretty poor as the Census Bureau emphasized for the information sector. Information sector revenue for the first quarter of 2009 was $275.3 billion, a decrease of 0.9 percent from the fourth quarter of 2008. Although this report is on the list of principal federal economic indicators, not included in our news index because its format is too disaggregated and difficult to summarize.
Tuesday, June 9, 2009
Middlemen not out of woods yet
Despite a sluggish month for wholesalers, the news index is at 42.9 percent, indicating that a growing proportion of the news released by the government in the Principal Federal Economic Indicator reports has been good so far in June.
April 2009 sales of merchant wholesalers were $309.4 billion, down 0.4 percent from last month. End-of-month inventories were $405.4 billion, down 1.4 percent from last month. The wholesalers’ inventory-to-sales ratio ticked down to 1.31 from 1.32. (Bad. Not enough good news to nudge this to a mixed from the prima facie bad of a further decline in sales in the wholesalers’ channel.)
April 2009 sales of merchant wholesalers were $309.4 billion, down 0.4 percent from last month. End-of-month inventories were $405.4 billion, down 1.4 percent from last month. The wholesalers’ inventory-to-sales ratio ticked down to 1.31 from 1.32. (Bad. Not enough good news to nudge this to a mixed from the prima facie bad of a further decline in sales in the wholesalers’ channel.)
Friday, June 5, 2009
Promising start to June
More than a quarter of the news that will be released this month is out and it has been evenly split between good and bad news. The month’s good news index is at 50.0 as we close out the first week of June.
New orders for manufactured goods have gone up two of the last three months after increasing $2.5 billion or 0.7 percent in April. Shipments, down nine consecutive months, decreased 0.2 percent. April’s unfilled orders-to-shipments ratio was 6.01, up from 5.98 in March. The inventories-to-shipments ratio was 1.45, down from 1.46 in March. (Mixed, an improving mix, but still a mixed bag.)
During the first quarter of 2009, productivity—as measured by output per hour—rose 1.6 percent in the nonfarm business sector; output fell 7.6 percent and hours of all persons fell 9.0 percent. Productivity growth for the first quarter was originally estimated at 0.8 percent. (A slightly better mix than the original report, but productivity gains driven by slower drops in output than hours aren’t as good as they seem.)
Nonfarm payroll employment fell by 345,000 in May, about half the average monthly decline for the prior 6 months. The unemployment rate continued to rise, increasing from 8.9 to 9.4 percent. (Bad news, and on close examination, not really less bad news than last month.)
In March, consumer credit decreased at an annual rate of 5-1/4 percent. A big, and troubling, portion of the decline came in the non-revolving credit line—stuff like auto loans and other credits such as loans for mobile homes, education, boats, trailers, or vacations. (Bad, getting credit back on a sustainable up-trend is critical.)
Although our proprietary index of labor market conditions fell by 2-1/2 percent, it still closed the gap on its 6-month trailing moving average for the second month in a row. In the past, a local trough in this gap has been closely associated with the end of a recession.
New orders for manufactured goods have gone up two of the last three months after increasing $2.5 billion or 0.7 percent in April. Shipments, down nine consecutive months, decreased 0.2 percent. April’s unfilled orders-to-shipments ratio was 6.01, up from 5.98 in March. The inventories-to-shipments ratio was 1.45, down from 1.46 in March. (Mixed, an improving mix, but still a mixed bag.)
During the first quarter of 2009, productivity—as measured by output per hour—rose 1.6 percent in the nonfarm business sector; output fell 7.6 percent and hours of all persons fell 9.0 percent. Productivity growth for the first quarter was originally estimated at 0.8 percent. (A slightly better mix than the original report, but productivity gains driven by slower drops in output than hours aren’t as good as they seem.)
Nonfarm payroll employment fell by 345,000 in May, about half the average monthly decline for the prior 6 months. The unemployment rate continued to rise, increasing from 8.9 to 9.4 percent. (Bad news, and on close examination, not really less bad news than last month.)
In March, consumer credit decreased at an annual rate of 5-1/4 percent. A big, and troubling, portion of the decline came in the non-revolving credit line—stuff like auto loans and other credits such as loans for mobile homes, education, boats, trailers, or vacations. (Bad, getting credit back on a sustainable up-trend is critical.)
Although our proprietary index of labor market conditions fell by 2-1/2 percent, it still closed the gap on its 6-month trailing moving average for the second month in a row. In the past, a local trough in this gap has been closely associated with the end of a recession.
Tuesday, June 2, 2009
A June jump?
June starts with two upbeat reports. Construction spending edged up again and personal income rose a bit. The disposable bit of income, that part left after taxes, rose even more than the total as a result of reduced current taxes and increased social benefit payments.
Total construction activity for April 2009 ($968.7 billion) was 0.8 percent above the revised March 2009. Personal income increased 0.5 percent and disposable personal income increased 1.1 percent in April. Both are good news.
Rather than recite the good news diffusion index here, I’ll ask a question: “Is it good news that spending on construction of manufacturing facilities took a big upward swing starting last April and had the strongest over-the-year and year-to-date percent increases of the sectors the Census Bureau reports on?”
Total construction activity for April 2009 ($968.7 billion) was 0.8 percent above the revised March 2009. Personal income increased 0.5 percent and disposable personal income increased 1.1 percent in April. Both are good news.
Rather than recite the good news diffusion index here, I’ll ask a question: “Is it good news that spending on construction of manufacturing facilities took a big upward swing starting last April and had the strongest over-the-year and year-to-date percent increases of the sectors the Census Bureau reports on?”
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