Approaching breakeven?

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?)