Friday, October 30, 2009

Easing out of October

It’s not like the economy is Usain Bolt—slowing up at the end of a month isn’t going to work very often. Despite a lackluster finish, however, October manages to close out with the news just over 60 percent good.

Total compensation costs for civilian workers increased 0.4 percent from June to September. For the year ending in September, compensation costs and wages and salaries each rose 1.5 percent and benefits increased 1.6 percent. Good, not great, but plus is good.

Personal income decreased less than 0.1 percent, disposable personal income decreased less than 0.1 percent, and personal consumption expenditures decreased 0.5 percent in September. Not good, the income side was essentially unchanged, but growing consumption is important now.

Thursday, October 29, 2009

Did the base just get firmer?

Has it been almost a month since this was last updated? The downside of a good month for me. In any case, it has been a pretty good month in terms of the news coming out of the Federal statistical system. The GNDI—our proprietary measure of the relative balance between good and bad news in the topside paragraphs of the Principal Federal Economic Indicators—has crept back over 60 percent, with just personal income and the employment cost reports yet to go. The 3-month average of the good news index is now over 60 as well.

Total construction activity for August 2009 was 0.8 percent above the revised estimate for July. Good news.

New orders for manufactured goods decreased 0.8 percent in August. Shipments decreased 0.3 percent. Bad news, even if the orders decline was mostly a swing in transportation equipment.

August 2009 sales of merchant wholesalers were up 1.0 percent from July. End-of-month inventories were down 1.3 percent. Good news all around.

The Nation's international deficit in goods and services decreased to $30.7 billion in August from $31.9 billion (revised) in July, as exports increased and imports decreased. Generally good things.

U.S. retail and food service sales for September decreased 1.5 percent from the previous month. Not good at all.

U.S. total business sales for August were $989.6 billion, up 1.0 percent from the previous month. Month-end inventories were down 1.5 percent. Good news.

Privately-owned housing starts in September 2009 were 0.5 percent above the revised August 2009 estimate. Good.

New orders for manufactured durable goods increased 1.0 percent in September. Good.
Sales of new one-family houses in September 2009 were at a seasonally adjusted annual rate 3.6% below the revised August 2009 rate. Bad and especially disappointing after the good starts data.

Consumer credit decreased at an annual rate of 5-3/4 percent in August 2009. Bad; there has to be an end to retrenching at some point.

Nonfarm payroll employment continued to decline in September and the unemployment rate continued to trend up. Bad; there has to be a beginning of re-employment at some point.

Industrial production rose 0.7 percent in September after an upwardly revised gain of 1.2 percent in August. In September, the capacity utilization rate for total industry increased to 70.5 percent. Good news.

The U.S. Import Price Index edged up 0.1 percent in September. The increase was led by higher nonfuel prices, which more than offset lower fuel prices. The price index for U.S. exports declined 0.3. This is one of those judgment calls—the topsides were relatively tame, but the import side saw too-large swings, both down for fuel and up for other goods. Neutral, on balance.

The Producer Price Index for Finished Goods declined 0.6 percent in September. The index for finished energy goods fell 2.4 percent, while prices for finished goods less foods and energy edged down 0.1 percent. Good, on a judgment based on the recently announced policy of placing higher weight on “core” measures.

The Consumer Price Index for All Urban Consumers (CPI-U) rose 0.2 percent in September. The “core” all items less food and energy index also increased 0.2 percent. Good all around.

Real average hourly earnings fell 0.1 percent from August to September. This decline stemmed from CPI-W, up by 0.2 percent, outpacing 0.1 percent growth in average hourly earnings. Bad, especially as average weekly earnings fell 0.4 percent as weekly hours declined.

Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- increased at an annual rate of 3.5 percent in the third quarter of 2009. Good news and especially important as the first good news from this report since the estimates for the second quarter of 2008