December gains consolidate

With the majority of reports already out, December is shaping up as a month that firmly re-establishes the upward trend in the Good News Index (GNI). Seventy-eight percent of the news released so far this month has been good and the 3-month average of the GNI has regained its upward momentum. A very small uptick in real weekly earnings joins the slight dip in the unemployment rate to hold out the hope that recovery is even spreading, however slowly, to the labor markets.

U.S. retail sales for November increased 1.3 percent from the previous month. A second good month in a row.

Total business sales for October 2009 were $1,004.0 billion, up 1.1 percent from September. Returns business sales to the good news column.

The U.S. Import Price Index advanced 1.7 percent in November, led by a 7.3 percent rise in fuel prices. Nonfuel import prices rose 0.4 percent. Export prices advanced 0.8 percent. Mixed news, and relies on the nonfuel imports to get that good.

Industrial production increased 0.8 percent in November after having been unchanged in October. Manufacturing production advanced 1.1 percent, with broad-based gains among both durables and nondurables. Good, especially the part about “broad based”.

Manufacturing corporations' seasonally adjusted after-tax profits averaged 6.8 cents per dollar of sales for the third quarter of 2009, up 2.7 cents from 4.2 cents in the second quarter of 2009. Good news foreshadowing better, as profits data tend to do.

The Producer Price Index for Finished Goods rose 1.8 percent, seasonally adjusted, in November. The index for finished goods less foods and energy rose 0.5 percent in November. This is on the very cusp of being too much pricing power; my judgment on the overall report is that it is, taken somewhat optimistically based on core index movements, neutral.

CPI-U increased 0.4 percent in November after rising 0.3 percent in October. The index for all items less food and energy was unchanged in November. Good, stable.

Real average hourly earnings fell 0.5 percent from October to November 2009. Real weekly earnings, however, rose 0.1 percent over the month. The decline in real average hourly earnings was more than offset by a 0.6 percent increase in the average work week. Mixed; a “positive zero”.

Housing starts in November 2009 were at an annual rate is 8.9 percent above the rate in October. Good news that doesn’t quite retrace the decline last month.