The good news diffusion index was unchanged at 60.5 in November. Reports on factory orders, retail sales, new home sales, and personal income were positive in November where they had been negative the month before. Conversely, the reports on foreign trade, business sales, housing starts, and durable goods orders were negative where they had been good news in October. The 3-month moving average of the GNDI slipped a bit to 60.4.
November closed out with the following reports:
New orders for manufactured durable goods decreased 0.6 percent in October. Bad news, especially considered with drops in shipments and unfilled orders.
Sales of new one-family houses in October 2009 were at an annual rate 6.2% above September 2009. Good news for a struggling sector.
Personal income increased 0.2 percent and disposable personal income increased 0.4 percent in October. Personal consumption expenditures increased $68.3 billion, or 0.7 percent. Quite good news all around.
Monday, November 30, 2009
Tuesday, November 24, 2009
Off the pace?
Both the monthly good news diffusion index and its 3-month moving average are going into the last week of November lower than they were at the end of October. It will take a very strong finish—3 points out of a possible 4—to keep momentum up.
The Nation's international trade deficit in goods and services increased in September, as imports increased more than exports. Bad, but, as a switch, for better reasons—faster increases, rather than slower declines.
U.S. total business sales for September 2009 were down 0.3 percent from August. Bad.
U.S. retail sales increased 1.4 percent in October. Good.
Privately-owned housing starts in October 2009 were at a seasonally adjusted annual rate of 529,000, more than 10 percent below September. Bad, shockingly bad.
The U.S. Import Price Index rose 0.7 percent in October, led by a 1.8 percent increase in fuel prices. U.S. export prices advanced 0.3 percent in October. Only the disproportionate impact of fuel prices kept this from being too bad. Rated neutral.
The Producer Price Index for Finished Goods advanced 0.3 percent in October; the index for finished goods less foods and energy moved down 0.6 percent. The decline in core prices pushes the envelope a bit, but on balance, this was a good news report.
The Consumer Price Index for All Urban Consumers (CPI-U) rose 0.3 percent in October. The index for all items less food and energy rose 0.2 percent in October, the same increase as in September. Good.
Real average weekly earnings fell 0.1 percent over the month, as a result of a decline in real average hourly earnings and an unchanged average work week. Since reaching a recent high point in December 2008, real average weekly earnings have fallen by 1.9 percent. Bad. Not horrible, but bad.
Industrial production increased 0.1 percent in October after having averaged monthly gains of about 0.9 percent over the previous three months. Capacity utilization for total industry moved up 0.2 percentage point to 70.7 percent. Good. Not spectacular, but good.
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 2.8 percent in the third quarter of 2009. The second estimate of the third-quarter increase in real GDP is 0.7 percentage point lower than the advance estimate issued last month. Less good than we thought, but still in the right direction.
The Nation's international trade deficit in goods and services increased in September, as imports increased more than exports. Bad, but, as a switch, for better reasons—faster increases, rather than slower declines.
U.S. total business sales for September 2009 were down 0.3 percent from August. Bad.
U.S. retail sales increased 1.4 percent in October. Good.
Privately-owned housing starts in October 2009 were at a seasonally adjusted annual rate of 529,000, more than 10 percent below September. Bad, shockingly bad.
The U.S. Import Price Index rose 0.7 percent in October, led by a 1.8 percent increase in fuel prices. U.S. export prices advanced 0.3 percent in October. Only the disproportionate impact of fuel prices kept this from being too bad. Rated neutral.
The Producer Price Index for Finished Goods advanced 0.3 percent in October; the index for finished goods less foods and energy moved down 0.6 percent. The decline in core prices pushes the envelope a bit, but on balance, this was a good news report.
The Consumer Price Index for All Urban Consumers (CPI-U) rose 0.3 percent in October. The index for all items less food and energy rose 0.2 percent in October, the same increase as in September. Good.
Real average weekly earnings fell 0.1 percent over the month, as a result of a decline in real average hourly earnings and an unchanged average work week. Since reaching a recent high point in December 2008, real average weekly earnings have fallen by 1.9 percent. Bad. Not horrible, but bad.
Industrial production increased 0.1 percent in October after having averaged monthly gains of about 0.9 percent over the previous three months. Capacity utilization for total industry moved up 0.2 percentage point to 70.7 percent. Good. Not spectacular, but good.
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 2.8 percent in the third quarter of 2009. The second estimate of the third-quarter increase in real GDP is 0.7 percentage point lower than the advance estimate issued last month. Less good than we thought, but still in the right direction.
Tuesday, November 10, 2009
Striding into November
November leads from strength. In the early going, good news came out twice as often as bad news. One must be concerned, however, that all the bad news seemed to fall on the shoulders of the economy’s workers and consumers—the continued decline in revolving credit and the still grim state of the labor market.
Our proprietary index of labor market conditions dropped 1.7 percent to 67.4 (2007=100). This marks the second straight month the index has failed to gain ground relative to its 6-month moving average. Such pauses have been the mark of recoveries that have been termed “jobless” in the past.
Total construction activity for September 2009 was 0.8 percent above August. Good news in a battered sector.
New orders for manufactured goods increased 0.9 percent in September. Good.
Sales of merchant wholesalers were up 0.7 in September. End-of-month inventories were down 0.9 percent. Good.
Productivity increased 9.5 percent in the nonfarm business sector during the third quarter of 2009, and unit labor costs fell 5.2 percent. Good, especially as a significant portion of it was an increase in output.
In October, the unemployment rate rose to 10.2 percent, the highest since April 1983, and nonfarm payroll employment continued to decline. Bad, just plain bad.
Consumer credit decreased at an annual rate of 6 percent in the third quarter of 2009 and at an annual rate of 7.2 percent in September. Bad, increasingly bad at the end.
Our proprietary index of labor market conditions dropped 1.7 percent to 67.4 (2007=100). This marks the second straight month the index has failed to gain ground relative to its 6-month moving average. Such pauses have been the mark of recoveries that have been termed “jobless” in the past.
Total construction activity for September 2009 was 0.8 percent above August. Good news in a battered sector.
New orders for manufactured goods increased 0.9 percent in September. Good.
Sales of merchant wholesalers were up 0.7 in September. End-of-month inventories were down 0.9 percent. Good.
Productivity increased 9.5 percent in the nonfarm business sector during the third quarter of 2009, and unit labor costs fell 5.2 percent. Good, especially as a significant portion of it was an increase in output.
In October, the unemployment rate rose to 10.2 percent, the highest since April 1983, and nonfarm payroll employment continued to decline. Bad, just plain bad.
Consumer credit decreased at an annual rate of 6 percent in the third quarter of 2009 and at an annual rate of 7.2 percent in September. Bad, increasingly bad at the end.
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