I’m shocked to see that it’s been 3 months since I last posted. Yes, I’ve been busy, what with a fairly time consuming project with the Census Bureau to work on census coverage measurement and the renewal of thrice-a-week rugby coaching on the staff of my alma mater, but 3 months!
In the time since we last spoke, the National Bureau of Economic Research Business Cycle Dating Committee declared that June 2009 marked the trough of the recession. As readers of this blog know, NBER were very close to the truth; most likely there is no significant statistical or substantive difference between April and June. And so much for my nascent career as a BCD watcher.
Since NBER’s announcement, the economy went into a truly frightening stall. In the July 5 post, I was upset by a 9.9 index point drop in the Good News Index (GNI). Imagine how I would have felt if I had been paying attention the next month as the index fell by 33 points or the month after that as the 3-month moving average of the index dangled just fractions of a point above 50.
In September and October, the GNI moved back to the three-quarters to two-thirds range and the moving average came back to 63 and change in October. As I frantically worked to catch up on the index, I was heartened to see that there seems to be a growing flicker of life in the housing and related sectors, but less sanguine about the strength of the consumption-dependent sectors as consumers and lenders continue to restructure their revolving credit accounts.
The popping and only very slow reflation of what might be termed a conspicuous “consumption bubble” is a cycle that has been under-analyzed. How long will it be before a critical mass of consumers is willing to say, “I want that, and I’m willing to borrow to get it!”?
Friday, October 29, 2010
Monday, July 19, 2010
It's not whether or not you fall down, it's whether or not you get back up
Apparently, my renewed attention has not been sufficient to re-spark progress. Other than core prices remaining under control (a band of about half a percent either side of zero), the most recent reports have been worse than their immediate predecessors or were continued bad news.
Total nonfarm payroll employment declined by 125,000 in June, and the unemployment rate edged down to 9.5 percent. Our proprietary labor market index edged down for the first time in 4 months, and is desperately clinging to a place just above its trailing 6-month moving average. Mixed on the surface and neutral after an in-depth look.
Total construction activity for May 2010 was 0.2 percent below April. Bad.
Manufacturer’s shipments decreased 1.3 percent in May. New orders for manufactured goods decreased 1.4 percent. Bad.
May 2010 sales of merchant wholesalers were down 0.3 percent from April. Inventories were up 0.5 percent. Bad.
The Nation's international trade deficit in goods and services increased to $42.3 billion in May 2010, as imports increased more than exports. Bad, albeit for all the right reasons.
Retail and food service sales for June decreased -0.5 percent from the previous month. Bad.
Total business sales for May 2010 were down 0.9% from April. Bad.
The Producer Price Index for Finished Goods fell 0.5 percent in June. prices for finished goods rose 2.8 percent for the 12 months ended June 2010, their third straight month of slowing year-over-year advances. Good, especially as the monthly decline was strictly a food-and-energy thing.
The CPI declined 0.1 percent in June after falling 0.2 percent in May. The index for all items less food and energy increased 0.2 percent in June after increasing 0.1 percent in May. Good.
Real average weekly earnings fell 0.2 percent over the month of June. Bad.
Consumer credit decreased at an annual rate of 4-1/2 percent in May 2010. Bad.
Industrial production edged up 0.1 percent in June. The capacity utilization rate for total industry was unchanged. Neutral.
Import prices declined for the second consecutive month, dropping 1.3 percent in June. Export prices fell 0.2 percent. Neutral.
Total nonfarm payroll employment declined by 125,000 in June, and the unemployment rate edged down to 9.5 percent. Our proprietary labor market index edged down for the first time in 4 months, and is desperately clinging to a place just above its trailing 6-month moving average. Mixed on the surface and neutral after an in-depth look.
Total construction activity for May 2010 was 0.2 percent below April. Bad.
Manufacturer’s shipments decreased 1.3 percent in May. New orders for manufactured goods decreased 1.4 percent. Bad.
May 2010 sales of merchant wholesalers were down 0.3 percent from April. Inventories were up 0.5 percent. Bad.
The Nation's international trade deficit in goods and services increased to $42.3 billion in May 2010, as imports increased more than exports. Bad, albeit for all the right reasons.
Retail and food service sales for June decreased -0.5 percent from the previous month. Bad.
Total business sales for May 2010 were down 0.9% from April. Bad.
The Producer Price Index for Finished Goods fell 0.5 percent in June. prices for finished goods rose 2.8 percent for the 12 months ended June 2010, their third straight month of slowing year-over-year advances. Good, especially as the monthly decline was strictly a food-and-energy thing.
The CPI declined 0.1 percent in June after falling 0.2 percent in May. The index for all items less food and energy increased 0.2 percent in June after increasing 0.1 percent in May. Good.
Real average weekly earnings fell 0.2 percent over the month of June. Bad.
Consumer credit decreased at an annual rate of 4-1/2 percent in May 2010. Bad.
Industrial production edged up 0.1 percent in June. The capacity utilization rate for total industry was unchanged. Neutral.
Import prices declined for the second consecutive month, dropping 1.3 percent in June. Export prices fell 0.2 percent. Neutral.
Monday, July 5, 2010
Stumbling through June
What’s up here? I get a good enough month at First XV Communications to put this blog on the back burner in June and things fall apart. The Good news index (GNI) fell by 9.9 index points during the month. Much of the accounting for the fall goes to the housing and related markets, but the rot seemed to be seeping into the durables factories as well. With the first major reports in July looking a bit dodgy as well (details in a later post), I guess I’ll just have to keep my nose to this particular grindstone, for the good of all.
In April 2010, wholesale trade edged up 0.7 percent over March. Good.
The Nation's international trade deficit in goods and services increased very slightly in April, as exports decreased more than imports. Bad all around.
Retail sales for May decreased -1.2 percent from the previous month. Bad.
Total business sales for April 2010 were up 0.6% from March. Good.
Manufacturing corporations' seasonally adjusted after-tax profits averaged 7.7 cents per dollar of sales for the first quarter of 2010, not statistically different from the fourth quarter of 2009. Neutral.
Housing starts in May 2010 10.0 percent below April. Awful.
After-tax profits for retail corporations averaged 3.0 cents per dollar of sales for the first quarter 2010, down 0.1 cents from the fourth quarter. Bad.
Sales of new one-family houses in May 2010 were 32.7 percent below the revised April rate. Truly awful.
New orders for manufactured durable goods decreased 1.1 percent in May. Alarmingly awful.
Import prices fell 0.6 percent in May. Fuel prices reversed the recent upward trend, falling 4.9 percent in May. In contrast to fuel prices, nonfuel prices continued to trend up in May, rising 0.5 percent. Everything is right on the knife edge between good and bad; rated as mixed or neutral.
The Producer Price Index for Finished Goods moved down 0.3 percent in May. Prices for finished goods rose 5.3 percent for the 12 months ended May 2010. This was the second consecutive month of slowing year-over-year advances. Good.
The Consumer Price Index for All Urban Consumers (CPI-U) declined 0.2
percent in May. The index for all items less food and energy increased 0.1 percent. Good.
Real average hourly earnings for all employees rose 0.5 percent from April to May. Real average weekly earnings rose 0.8 percent over the month. Good and better.
Real gross domestic product increased at a revised annual rate of 2.7 percent in the first quarter of 2010. Still good, but less good than we had thought.
Personal income and disposable personal income both increased 0.4 percent in May. Good.
Consumer credit increased at an annual rate of 1/2 percent in April 2010. Good.
Industrial production advanced 1.2 percent in May after having risen 0.7 percent in April. The capacity utilization rate for total industry rose 1.0 percentage point. Good.
In April 2010, wholesale trade edged up 0.7 percent over March. Good.
The Nation's international trade deficit in goods and services increased very slightly in April, as exports decreased more than imports. Bad all around.
Retail sales for May decreased -1.2 percent from the previous month. Bad.
Total business sales for April 2010 were up 0.6% from March. Good.
Manufacturing corporations' seasonally adjusted after-tax profits averaged 7.7 cents per dollar of sales for the first quarter of 2010, not statistically different from the fourth quarter of 2009. Neutral.
Housing starts in May 2010 10.0 percent below April. Awful.
After-tax profits for retail corporations averaged 3.0 cents per dollar of sales for the first quarter 2010, down 0.1 cents from the fourth quarter. Bad.
Sales of new one-family houses in May 2010 were 32.7 percent below the revised April rate. Truly awful.
New orders for manufactured durable goods decreased 1.1 percent in May. Alarmingly awful.
Import prices fell 0.6 percent in May. Fuel prices reversed the recent upward trend, falling 4.9 percent in May. In contrast to fuel prices, nonfuel prices continued to trend up in May, rising 0.5 percent. Everything is right on the knife edge between good and bad; rated as mixed or neutral.
The Producer Price Index for Finished Goods moved down 0.3 percent in May. Prices for finished goods rose 5.3 percent for the 12 months ended May 2010. This was the second consecutive month of slowing year-over-year advances. Good.
The Consumer Price Index for All Urban Consumers (CPI-U) declined 0.2
percent in May. The index for all items less food and energy increased 0.1 percent. Good.
Real average hourly earnings for all employees rose 0.5 percent from April to May. Real average weekly earnings rose 0.8 percent over the month. Good and better.
Real gross domestic product increased at a revised annual rate of 2.7 percent in the first quarter of 2010. Still good, but less good than we had thought.
Personal income and disposable personal income both increased 0.4 percent in May. Good.
Consumer credit increased at an annual rate of 1/2 percent in April 2010. Good.
Industrial production advanced 1.2 percent in May after having risen 0.7 percent in April. The capacity utilization rate for total industry rose 1.0 percentage point. Good.
Monday, May 31, 2010
A flowery end to May
The good news index (GNI), a measure of the diffusion of good headline numbers among a subset of the principal Federal economic indicators, rebounded strongly in May to reach 78.9 percent. This was the best month so far in the increasingly evident recovery.
As the evidence for recovery strengthens, I’ve become something of a NBER Business Cycle Dating Committee (NBCD) watcher. (NBCD watchers are something like Fed watchers, except more intellectual and better looking. To be fair, it must be noted that Fedwatchers are far more wealthy.)
Of the four NBCD members who have made easy-to-find statements about the possibility the economy is in a recovery, three made strong statements that it was their personal view that the economy has been in a recovery for some time. The fourth indicated that we should look at a longer sequence of positive reports before deciding.
In any case, we will stick by our December 4, 2009, call that the technical indicators we make or follow point to an April 2009 turning point. We’ll also stick to our call that the NBCD will not confirm the trough until nearly Christmas.
March exports rose to $147.9 billion but imports rose to $188.3 billion, resulting in a trade deficit of $40.4 billion, up from $39.4 billion in February. Two wrongs may not make a right, but two encouraging signs for demand can lead to a negative report; score a zero.
The price index for imports increased 0.9 percent in April. About 55 percent of the April increase was attributable to higher fuel prices. Nonfuel import prices rose 0.5 percent. Export prices increased 1.2 percent in April. The April advance was led by higher nonagricultural prices. Overall, this is just too much price inflation; score a zero.
U.S. retail and food service sales increased 0.4 percent from the previous month. Not a statistically significant change—score 0.5.
U.S. total business sales for March 2010 were up 2.3 percent from February. Good.
Industrial production increased 0.8 percent in April after having risen 0.2 percent in March. Good.
The Producer Price Index for Finished Goods declined 0.1 percent in April. At the earlier stages of processing, prices received by producers of intermediate goods moved up 0.8 percent and the crude goods index fell 1.2 percent. Good, on balance.
The CPI declined 0.1 percent in April after rising 0.1 percent in March. The index for all items less food and energy was unchanged in both March and April. Good.
Real average hourly earnings for all employees rose 0.1 percent from March to April. Real average weekly earnings rose 0.4 percent over the month. Good.
Sales of new one-family houses in April 2010 were at a seasonally adjusted annual rate 14.8 percent March. Good.
New orders for manufactured durable goods increased 2.9 percent in April. Good.
Real gross domestic product increased at a revised annual rate of 3.0 percent in the first quarter of 2010. The good news is muted a bit.
Personal income increased 0.4 percent in April. Personal consumption expenditures (PCE) increased $4.0 billion, or less than 0.1 percent. Mixed, albeit a good mix.
As the evidence for recovery strengthens, I’ve become something of a NBER Business Cycle Dating Committee (NBCD) watcher. (NBCD watchers are something like Fed watchers, except more intellectual and better looking. To be fair, it must be noted that Fedwatchers are far more wealthy.)
Of the four NBCD members who have made easy-to-find statements about the possibility the economy is in a recovery, three made strong statements that it was their personal view that the economy has been in a recovery for some time. The fourth indicated that we should look at a longer sequence of positive reports before deciding.
In any case, we will stick by our December 4, 2009, call that the technical indicators we make or follow point to an April 2009 turning point. We’ll also stick to our call that the NBCD will not confirm the trough until nearly Christmas.
March exports rose to $147.9 billion but imports rose to $188.3 billion, resulting in a trade deficit of $40.4 billion, up from $39.4 billion in February. Two wrongs may not make a right, but two encouraging signs for demand can lead to a negative report; score a zero.
The price index for imports increased 0.9 percent in April. About 55 percent of the April increase was attributable to higher fuel prices. Nonfuel import prices rose 0.5 percent. Export prices increased 1.2 percent in April. The April advance was led by higher nonagricultural prices. Overall, this is just too much price inflation; score a zero.
U.S. retail and food service sales increased 0.4 percent from the previous month. Not a statistically significant change—score 0.5.
U.S. total business sales for March 2010 were up 2.3 percent from February. Good.
Industrial production increased 0.8 percent in April after having risen 0.2 percent in March. Good.
The Producer Price Index for Finished Goods declined 0.1 percent in April. At the earlier stages of processing, prices received by producers of intermediate goods moved up 0.8 percent and the crude goods index fell 1.2 percent. Good, on balance.
The CPI declined 0.1 percent in April after rising 0.1 percent in March. The index for all items less food and energy was unchanged in both March and April. Good.
Real average hourly earnings for all employees rose 0.1 percent from March to April. Real average weekly earnings rose 0.4 percent over the month. Good.
Sales of new one-family houses in April 2010 were at a seasonally adjusted annual rate 14.8 percent March. Good.
New orders for manufactured durable goods increased 2.9 percent in April. Good.
Real gross domestic product increased at a revised annual rate of 3.0 percent in the first quarter of 2010. The good news is muted a bit.
Personal income increased 0.4 percent in April. Personal consumption expenditures (PCE) increased $4.0 billion, or less than 0.1 percent. Mixed, albeit a good mix.
Tuesday, May 11, 2010
Will the recovery flower in May?
Despite an employment report with mixed news at the top side, May’s good news index is running ahead of April’s through the first half dozen releases.
As we dig beneath the headline numbers on jobs, the news actually gets a little better—four of the five indicators that make up our labor market index improved in April. The employment-to-population ratio had the greatest positive impact, followed in order by aggregate hours, goods-producing employment, and long-term unemployment. The overall unemployment rate was a negative influence.
Overall, the labor market index rose one-half of 1 percent and was half an index point above its trailing 6-month average. The moving average itself advanced for the first time since early 2007.
Total construction activity for March 2010 was 0.2 percent above the February total. Not a significant change, but that’s an upgrade. Score it 0.5.
New orders for manufactured goods increased 1.3 percent in March. Good.
Sales of merchant wholesalers were up 2.4 percent in March 2010. Good.
Consumer credit increased at an annual rate of 1 percent in March 2010. Good.
Nonfarm business sector labor productivity increased at a 3.6 percent annual rate during the first quarter of 2010, with output rising 4.4 percent and hours worked rising 0.8 percent. Good all around.
Nonfarm payroll employment rose by 290,000 in April, the unemployment rate edged up to 9.9 percent, and the labor force increased sharply. Mixed.
As we dig beneath the headline numbers on jobs, the news actually gets a little better—four of the five indicators that make up our labor market index improved in April. The employment-to-population ratio had the greatest positive impact, followed in order by aggregate hours, goods-producing employment, and long-term unemployment. The overall unemployment rate was a negative influence.
Overall, the labor market index rose one-half of 1 percent and was half an index point above its trailing 6-month average. The moving average itself advanced for the first time since early 2007.
Total construction activity for March 2010 was 0.2 percent above the February total. Not a significant change, but that’s an upgrade. Score it 0.5.
New orders for manufactured goods increased 1.3 percent in March. Good.
Sales of merchant wholesalers were up 2.4 percent in March 2010. Good.
Consumer credit increased at an annual rate of 1 percent in March 2010. Good.
Nonfarm business sector labor productivity increased at a 3.6 percent annual rate during the first quarter of 2010, with output rising 4.4 percent and hours worked rising 0.8 percent. Good all around.
Nonfarm payroll employment rose by 290,000 in April, the unemployment rate edged up to 9.9 percent, and the labor force increased sharply. Mixed.
Wednesday, April 21, 2010
Keeping pace; must finish month strong
On indicator-to-indicator basis, the good-news index (GNI) for April is keeping pace with March, on net (2-1/2 points up and 2-1/2 points down). We’ll still need to have a strong finish to the month to keep the growing recovery up to speed. The two wild cards are new home sales, the only indicator with (plenty) of room to make better news in April, and the employment cost index, which makes its quarterly appearance in the GNI.
Consumer credit decreased at an annual rate of 5-1/2 percent in February 2010. Bad.
February 2010 sales of merchant wholesalers were up 0.8 percent from January. Good.
Total February exports of $143.2 billion and imports of $182.9 billion resulted in a goods and services deficit of $39.7 billion, up from $37.0 billion in January. Bad, albeit for all the best reasons.
The Import Price Index rose 0.7 percent in March. The increase was attributable to higher prices for both fuel and nonfuel imports and followed a 0.2 percent decline in February. Export prices also rose 0.7 percent in March. Neutral, at best.
On a seasonally adjusted basis, the CPI-U rose 0.1 percent in March; the index for all items less food and energy was unchanged. Good.
Real average weekly earnings rose 0.1 percent over the month, as a result of a 0.3 percent increase in the average work week offsetting a decrease in real average hourly earnings. Over the past 9 months, real average weekly earnings have changed little. Neutral.
Total business sales for February 2010 were up 0.3% from March. Good.
Retail and food service sales for March increased 1.6 percent from the previous month. Good.
Industrial production edged up 0.1 percent in March and increased at an annual rate of 7.8 percent in the first quarter. Good.
Privately-owned housing starts in March 2010 were at a seasonally adjusted annual rate 1.6 percent above the revised February 2010 estimate.
Consumer credit decreased at an annual rate of 5-1/2 percent in February 2010. Bad.
February 2010 sales of merchant wholesalers were up 0.8 percent from January. Good.
Total February exports of $143.2 billion and imports of $182.9 billion resulted in a goods and services deficit of $39.7 billion, up from $37.0 billion in January. Bad, albeit for all the best reasons.
The Import Price Index rose 0.7 percent in March. The increase was attributable to higher prices for both fuel and nonfuel imports and followed a 0.2 percent decline in February. Export prices also rose 0.7 percent in March. Neutral, at best.
On a seasonally adjusted basis, the CPI-U rose 0.1 percent in March; the index for all items less food and energy was unchanged. Good.
Real average weekly earnings rose 0.1 percent over the month, as a result of a 0.3 percent increase in the average work week offsetting a decrease in real average hourly earnings. Over the past 9 months, real average weekly earnings have changed little. Neutral.
Total business sales for February 2010 were up 0.3% from March. Good.
Retail and food service sales for March increased 1.6 percent from the previous month. Good.
Industrial production edged up 0.1 percent in March and increased at an annual rate of 7.8 percent in the first quarter. Good.
Privately-owned housing starts in March 2010 were at a seasonally adjusted annual rate 1.6 percent above the revised February 2010 estimate.
Friday, April 2, 2010
Gathering strength
March ended well, or at least profitably, and the employment situation report gave April a swift kick off. The Good news Index (GNI), the proportion of selected principal Federal economic indicator reports that headline good news, was 73.8 in March, and is now fully recovered from a mild dip in January.
The employment situation was pretty darn good on the topside and our own index of labor market conditions drawn from deeper in the report was up for the third time in the past six months. In addition, the March increase in the labor market index brought it up above its 6-month moving average. If we were securities market technical analysts, we would be talking about the index testing its downtrend by crossing over the average. And we would be calling that good news as well.
Nonfarm payroll employment increased by 162,000 in March, and the unemployment rate held at 9.7 percent. Good (tallied in April).
After-tax profits for large retailers averaged 3.0 cents per dollar of sales for the fourth quarter 2009, up 0.7 cents from third quarter 2009. Good (tallied in March).
Manufacturers' after-tax profits averaged 7.9 cents per dollar of sales for the fourth quarter of 2009, up 0.9 cents from the third quarter of 2009. Good tallied in March).
Personal income increased less than 0.1 percent, and disposable personal income or less than 0.1 percent, in February. Personal consumption expenditures inceased 0.3 percent. Neutral (tallied in April).
New orders for manufactured goods increased 0.6 percent in February. Good (tallied in April).
Total construction activity for February 2010 was 1.3 percent below January. Bad (tallied in April).
The employment situation was pretty darn good on the topside and our own index of labor market conditions drawn from deeper in the report was up for the third time in the past six months. In addition, the March increase in the labor market index brought it up above its 6-month moving average. If we were securities market technical analysts, we would be talking about the index testing its downtrend by crossing over the average. And we would be calling that good news as well.
Nonfarm payroll employment increased by 162,000 in March, and the unemployment rate held at 9.7 percent. Good (tallied in April).
After-tax profits for large retailers averaged 3.0 cents per dollar of sales for the fourth quarter 2009, up 0.7 cents from third quarter 2009. Good (tallied in March).
Manufacturers' after-tax profits averaged 7.9 cents per dollar of sales for the fourth quarter of 2009, up 0.9 cents from the third quarter of 2009. Good tallied in March).
Personal income increased less than 0.1 percent, and disposable personal income or less than 0.1 percent, in February. Personal consumption expenditures inceased 0.3 percent. Neutral (tallied in April).
New orders for manufactured goods increased 0.6 percent in February. Good (tallied in April).
Total construction activity for February 2010 was 1.3 percent below January. Bad (tallied in April).
Friday, March 26, 2010
Someone's gotta build on Marvin Gardens
Much like the GDP report, the good news index (GNI) is doing well as we close in on closing out March, but isn’t quite as good as we reported last month. However, in the fine print of BEA’s report there is a bit of good news, although profits were not quite as high in the fourth quarter as they were in the third, the cash flow they generated -- the internal funds available to corporations for investment –increased to $69.1 billion. In the GNI, in contrast, we look in vain for good news in a sector that traditionally leads the economy—housing and its associated construction activity. Doesn't somebody, anybody own all the yellows?
We have a couple of financial reports (for manufacturing, mining, and wholesale and for retail trade) left in March. I will be late getting on the durable goods report next Wednesday so I can slip it into April’s GNI.
For this week:
Sales of new one-family houses in February 2010 were at a seasonally adjusted annual rate 2.2 percent below January’s. Bad.
New orders for durable goods increased 0.5 percent in February. Good.
GDP increased at an annual rate of 5.6 percent in the fourth quarter of 2009. The third estimate of the fourth-quarter increase in real GDP is 0.3 percentage point lower than the second estimate. Good, albeit less good than we thought a month ago.
We have a couple of financial reports (for manufacturing, mining, and wholesale and for retail trade) left in March. I will be late getting on the durable goods report next Wednesday so I can slip it into April’s GNI.
For this week:
Sales of new one-family houses in February 2010 were at a seasonally adjusted annual rate 2.2 percent below January’s. Bad.
New orders for durable goods increased 0.5 percent in February. Good.
GDP increased at an annual rate of 5.6 percent in the fourth quarter of 2009. The third estimate of the fourth-quarter increase in real GDP is 0.3 percentage point lower than the second estimate. Good, albeit less good than we thought a month ago.
Thursday, March 18, 2010
Will March break out or break stride?
As we move into the last third of March, the housing sector and the job market are still dragging on the news. There are a lot of data still to be released this month, including a report on home sales next week. Let’s wait before making any grandiose interpretations of what has been, thus far, a fair-to-middling month. The good-news index (GNI) is at 71.9 thus far in March, just a little off February’s final pace.
January 2010 sales of merchant wholesalers were up 1.3 percent from December 2009. The inventory-sales ratio was a very lean 1.10. Good.
Total January exports of $142.7 billion and imports of $180.0 billion resulted in a goods and services deficit of $37.3 billion, down from $39.9 billion in December. Good on the topside, even if both exports and imports declined. Good.
Retail and food service sales increased 0.3 percent in February. Good.
Total business sales for January were up 0.6% from December 2009. Good.
Industrial production edged up 0.1 percent in February following a gain of 0.9 percent in January. Manufacturing decreased 0.2 percent in February, with mixed results among its major industries. The output of mines rose 2.0 percent, while the index for utilities rose 0.5 percent. Mixed, neutral.
Housing starts in February 2010 were 5.9 percent below the January rate. Bad, just plain cannot yet sustain a drive.
The Import Price Index fell 0.3 percent in February. The decrease was led by a 1.9 percent downturn in fuel prices, which more than offset a 0.2 percent advance in nonfuel prices. Export prices fell 0.5 percent in February after advancing 0.7 percent in each of the previous two months. Good news all around.
The Producer Price Index for Finished Goods declined 0.6 percent in February. This decrease followed a 1.4-percent advance in January and a 0.4-percent increase in December. The index for finished goods less foods and energy inched up 0.1 percent in February. Good, when viewed over time at the topside or when looking more heavily, as we do, on the core.
The Consumer Price Index was unchanged in February after increasing 0.2 percent in January. The index for all items less food and energy rose 0.1 percent in February after falling 0.1 percent in January. Good.
Real average weekly earnings fell 0.2 percent from January to February. Bad.
January 2010 sales of merchant wholesalers were up 1.3 percent from December 2009. The inventory-sales ratio was a very lean 1.10. Good.
Total January exports of $142.7 billion and imports of $180.0 billion resulted in a goods and services deficit of $37.3 billion, down from $39.9 billion in December. Good on the topside, even if both exports and imports declined. Good.
Retail and food service sales increased 0.3 percent in February. Good.
Total business sales for January were up 0.6% from December 2009. Good.
Industrial production edged up 0.1 percent in February following a gain of 0.9 percent in January. Manufacturing decreased 0.2 percent in February, with mixed results among its major industries. The output of mines rose 2.0 percent, while the index for utilities rose 0.5 percent. Mixed, neutral.
Housing starts in February 2010 were 5.9 percent below the January rate. Bad, just plain cannot yet sustain a drive.
The Import Price Index fell 0.3 percent in February. The decrease was led by a 1.9 percent downturn in fuel prices, which more than offset a 0.2 percent advance in nonfuel prices. Export prices fell 0.5 percent in February after advancing 0.7 percent in each of the previous two months. Good news all around.
The Producer Price Index for Finished Goods declined 0.6 percent in February. This decrease followed a 1.4-percent advance in January and a 0.4-percent increase in December. The index for finished goods less foods and energy inched up 0.1 percent in February. Good, when viewed over time at the topside or when looking more heavily, as we do, on the core.
The Consumer Price Index was unchanged in February after increasing 0.2 percent in January. The index for all items less food and energy rose 0.1 percent in February after falling 0.1 percent in January. Good.
Real average weekly earnings fell 0.2 percent from January to February. Bad.
Tuesday, March 9, 2010
Hope for the labor market?
No news is very nearly good news in the labor market this month; nearly, but not quite the facts are that payroll employment didn’t change very much (and that change was in the wrong direction) and the unemployment rate did not improve further. If I might attempt a medical analogy, the hemorrhaging has slowed to insignificance and the fever remains elevated but down from the peak. The good news from the Fed shows that the patient is starting to gain some confidence in the eventual return to full economic health.
Nonfarm payroll employment was little changed in February, and the unemployment rate held at 9.7 percent. Neutral.
Consumer credit increased at an annual rate of 2-1/2 percent in January 2010. Revolving credit decreased at an annual rate of2-1/4 percent and non-revolving credit increased at an annual rate of 5 percent. Good news.
Nonfarm payroll employment was little changed in February, and the unemployment rate held at 9.7 percent. Neutral.
Consumer credit increased at an annual rate of 2-1/2 percent in January 2010. Revolving credit decreased at an annual rate of2-1/4 percent and non-revolving credit increased at an annual rate of 5 percent. Good news.
Thursday, March 4, 2010
February comes to a good end
The good news index for February finished strong and was only 0.1 point lower than December 2009, the best month so far in the recovery. (We’re sticking, by the way, with our December 9, 2009, suggestion that the recession’s trough occurred in April 2009.)
Sales of new one-family houses in January were 11.2 percent below December 2009. Bad, very bad, and especially bad for a sector that we really need to see some sustained growth in.
New orders for manufactured durable goods increased 3.0 percent in January. Good, pretty darn good, in what is also a cyclically strategic sector.
Real gross domestic product (GDP) increased at an annual rate of 5.9 percent in the fourth quarter of 2009. An earlier estimated had pegged the overall economic growth rate at 5.7 percent. Good news.
As we move into March, we have found the following:
Total construction spending in January was 0.6 percent below December 2009. Bad.
Personal income increased 0.1 percent and disposable personal income decreased 0.4 percent, in January. Personal consumption expenditures increased 0.5 percent. Mixed—one good (expenditure), one bad (disposable income), one indifferent (personal income).
New orders for manufactured goods increased 1.7 percent in January. Shipments increased 0.3 percent. The orders backlog edged up to 5.54 months worth and the inventory sales ratio was unchanged at 1.29. All pretty good.
Productivity increased 6.9 percent in the nonfarm business sector during the fourth quarter of 2009 as unit labor costs fell 5.9 percent (seasonally adjusted annual rates, revised). In manufacturing, productivity rose 6.6 percent while unit labor costs fell 6.3 percent. Good.
Sales of new one-family houses in January were 11.2 percent below December 2009. Bad, very bad, and especially bad for a sector that we really need to see some sustained growth in.
New orders for manufactured durable goods increased 3.0 percent in January. Good, pretty darn good, in what is also a cyclically strategic sector.
Real gross domestic product (GDP) increased at an annual rate of 5.9 percent in the fourth quarter of 2009. An earlier estimated had pegged the overall economic growth rate at 5.7 percent. Good news.
As we move into March, we have found the following:
Total construction spending in January was 0.6 percent below December 2009. Bad.
Personal income increased 0.1 percent and disposable personal income decreased 0.4 percent, in January. Personal consumption expenditures increased 0.5 percent. Mixed—one good (expenditure), one bad (disposable income), one indifferent (personal income).
New orders for manufactured goods increased 1.7 percent in January. Shipments increased 0.3 percent. The orders backlog edged up to 5.54 months worth and the inventory sales ratio was unchanged at 1.29. All pretty good.
Productivity increased 6.9 percent in the nonfarm business sector during the fourth quarter of 2009 as unit labor costs fell 5.9 percent (seasonally adjusted annual rates, revised). In manufacturing, productivity rose 6.6 percent while unit labor costs fell 6.3 percent. Good.
Friday, February 19, 2010
Pace picks up
Good industrial production news, generally good news on the price side, and even a decent reading on real weekly earnings lead the good news index back up over 70 to 71.4 thus far in February. Let’s do be aware of the fact that import and producer prices are showing some tendency to rising at less comfortable rates, especially when energy and other volatile prices are included. Something to keep an eye on—perhaps the Fed agrees with this more than they let on in announcing their very modest discount rate “normalization.”
Housing starts in January 2010 were at a seasonally adjusted annual rate 2.8 percent above December’s. Good.
Industrial production increased 0.9 percent in January following a gain of 0.7 percent in December. The capacity utilization rate for total industry rose 0.7 percentage point to 72.6 percent. Good.
The Import Price Index advanced 1.4 percent in January as fuel and nonfuel prices each increased. Prices for nonfuel imports rose 0.4 percent. Export prices rose 0.8 percent. Nonagricultural export prices advanced 0.7 percent in January. Mixed, with overtones of upward pressure.
The Producer Price Index for Finished Goods rose 1.4 percent in January. About three-fourths of the broad-based January advance in the finished goods index can be traced to higher prices for energy goods. The index for finished goods less foods and energy moved up 0.3 percent in January after no change in December. Good enough, but be aware of some price pressure at the earlier stages of processing.
On a seasonally adjusted basis, the January Consumer Price Index rose 0.2 percent. Over the last 12 months, the index increased 2.6 percent. The index for all items less food and energy declined 0.1 percent in January. Good.
Real average hourly earnings were unchanged in January. A 0.2 percent increase in the Consumer Price Index was offset by a 0.2 percent increase in average hourly earnings for all employees. Real average weekly earnings grew 0.3 percent over the month. Good; it’s the weekly earnings that count in most households.
Housing starts in January 2010 were at a seasonally adjusted annual rate 2.8 percent above December’s. Good.
Industrial production increased 0.9 percent in January following a gain of 0.7 percent in December. The capacity utilization rate for total industry rose 0.7 percentage point to 72.6 percent. Good.
The Import Price Index advanced 1.4 percent in January as fuel and nonfuel prices each increased. Prices for nonfuel imports rose 0.4 percent. Export prices rose 0.8 percent. Nonagricultural export prices advanced 0.7 percent in January. Mixed, with overtones of upward pressure.
The Producer Price Index for Finished Goods rose 1.4 percent in January. About three-fourths of the broad-based January advance in the finished goods index can be traced to higher prices for energy goods. The index for finished goods less foods and energy moved up 0.3 percent in January after no change in December. Good enough, but be aware of some price pressure at the earlier stages of processing.
On a seasonally adjusted basis, the January Consumer Price Index rose 0.2 percent. Over the last 12 months, the index increased 2.6 percent. The index for all items less food and energy declined 0.1 percent in January. Good.
Real average hourly earnings were unchanged in January. A 0.2 percent increase in the Consumer Price Index was offset by a 0.2 percent increase in average hourly earnings for all employees. Real average weekly earnings grew 0.3 percent over the month. Good; it’s the weekly earnings that count in most households.
Thursday, February 18, 2010
Upgrade to trudge
The three reports issued last week nudged the good-news index (GNI) up over 60. Not yet at the quick march, but at least the shoulders are square and the eyes are front.
The rest of this week will be see mostly price reports—international, producer, and consumer—but housing starts and industrial production numbers also will feature.
U.S. retail and food service sales for January increased percent from the previous month. Good.
For December, imports rose faster than exports and the trade deficit increased to $40.2 billion from $36.4 billion in November. Bad, even if the reasons were good; increases in the deficit retard GDP growth.
Total business sales for December 2009 were 0.9% from November. Month end inventories were $ virtually unchanged over the month. Good.
The rest of this week will be see mostly price reports—international, producer, and consumer—but housing starts and industrial production numbers also will feature.
U.S. retail and food service sales for January increased percent from the previous month. Good.
For December, imports rose faster than exports and the trade deficit increased to $40.2 billion from $36.4 billion in November. Bad, even if the reasons were good; increases in the deficit retard GDP growth.
Total business sales for December 2009 were 0.9% from November. Month end inventories were $ virtually unchanged over the month. Good.
Tuesday, February 9, 2010
More plod or a dogtrot?
Based on the fact that the best news in the opening third of February was from the labor market, and that news was pretty much just further deceleration of the downtrend, it’s answer A—so far in February, we’re still plodding on in more or less the right direction.
Our labor market index did eke out a tiny over-the-month gain, but is still below its trend line. From a technical perspective, this indicates that the trend is still down, however much it may have decelerated.
The unemployment rate fell from 10.0 to 9.7 percent in January, and nonfarm payroll employment was essentially unchanged. Good, best in a long time.
Nonfarm business sector labor productivity increased at a 6.2 percent annual rate during the fourth quarter of 2009. This gain reflects increases of 7.2 percent in output and 1.0 percent in hours worked. Good.
In December, consumer credit decreased at an annual rate of 3/4 percent. Bad, a relatively small decline, but a decline nonetheless.
Total construction activity for December 2009 was 1.2 percent below November. Bad.
The homeownership rate in the fourth quarter 2009 was not statistically different from the fourth quarter 2008. The homeowner vacancy rate in fourth quarter 2009 was not statistically different from the fourth quarter 2008. Neutral. (Not included in GNI.)
New orders for manufactured goods increased 1.0 percent in December. Shipments increased 1.9 percent. Good.
December 2009 sales of merchant wholesalers were not much changed in December. Neutral (plus).
Our labor market index did eke out a tiny over-the-month gain, but is still below its trend line. From a technical perspective, this indicates that the trend is still down, however much it may have decelerated.
The unemployment rate fell from 10.0 to 9.7 percent in January, and nonfarm payroll employment was essentially unchanged. Good, best in a long time.
Nonfarm business sector labor productivity increased at a 6.2 percent annual rate during the fourth quarter of 2009. This gain reflects increases of 7.2 percent in output and 1.0 percent in hours worked. Good.
In December, consumer credit decreased at an annual rate of 3/4 percent. Bad, a relatively small decline, but a decline nonetheless.
Total construction activity for December 2009 was 1.2 percent below November. Bad.
The homeownership rate in the fourth quarter 2009 was not statistically different from the fourth quarter 2008. The homeowner vacancy rate in fourth quarter 2009 was not statistically different from the fourth quarter 2008. Neutral. (Not included in GNI.)
New orders for manufactured goods increased 1.0 percent in December. Shipments increased 1.9 percent. Good.
December 2009 sales of merchant wholesalers were not much changed in December. Neutral (plus).
Friday, January 29, 2010
They're off and plodding in 2010
Oops, my bad. I read my spreadsheet rather than the OMB schedule of release dates to say on Monday we had five reports left in January. Unfortunately, today’s excellent GDP report was the last bit of news we’ll be getting. Even that welcome news left the good news index (GNI) at 55.9, down a great deal from December. A slow, but not entirely negative, start.
I’ve finally caught up with the calculations on our proprietary index of labor market conditions; no big prize for having guessed that it went down a bit in January as well. Discouraging as that is, the index edged a bit closer to its 6-month average, signaling further deceleration in the labor market’s slide.
On balance, I can stick with my call from December 4, 2009, that the recession sputtered into recovery in April of that year. Based solely on the average relationship between business-cycle troughs and labor-market toughs in recent recessions, it may be the last quarter of this year before the labor market begins a sustained upswing.
Sales of new one-family houses in December 2009 were at a rate 7.6 percent below November‘s. More bad news for this troubled sector.
New orders for manufactured durable goods in December increased 0.3 percent. Good news, especially with shipments up and inventories nudging down.
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 5.7 percent in the fourth quarter of 2009. Good and had more than just inventory accumulation behind it.
I’ve finally caught up with the calculations on our proprietary index of labor market conditions; no big prize for having guessed that it went down a bit in January as well. Discouraging as that is, the index edged a bit closer to its 6-month average, signaling further deceleration in the labor market’s slide.
On balance, I can stick with my call from December 4, 2009, that the recession sputtered into recovery in April of that year. Based solely on the average relationship between business-cycle troughs and labor-market toughs in recent recessions, it may be the last quarter of this year before the labor market begins a sustained upswing.
Sales of new one-family houses in December 2009 were at a rate 7.6 percent below November‘s. More bad news for this troubled sector.
New orders for manufactured durable goods in December increased 0.3 percent. Good news, especially with shipments up and inventories nudging down.
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 5.7 percent in the fourth quarter of 2009. Good and had more than just inventory accumulation behind it.
Monday, January 25, 2010
Resolutions and hangovers.
It has been a while since my last post—travel, kids home from college, kids back to college and other activities surrounding a Merry Christmas and, thus far, Happy New Year.
One 2010 resolution is to make more frequent postings; another is to maintain a good news diffusion series based on reference dates in addition to the current index based on release dates. The release-based index is a sort of index of psychological inputs—the news that economic actors are getting. The somewhat more delayed reference date index will better synch to underlying conditions. I invite readers to keep me honest on both these resolutions.
The economy itself might have done well to adopt a resolution to keep up its end-of-year momentum. Instead, as January nears its end, the monthly good news index (GNI) is at 53.6, hung over well short of the breadth it had shown in January. There are five more reports to come this month, and it will take a .800 average to keep the GNI from slipping back to pre-November levels.
Summary of January releases to date:
Total construction activity for November 2009 0.6 percent below October 2009. Bad report from the weak sister sector.
New orders for manufactured goods rose 1.1 percent to $365.3 billion in November. Good.
November 2009 sales of merchant wholesalers were up 3.3 percent from the previous month. End-of-month inventories were up 1.5 percent. Both facts good at this point in the cycle.
The Nation's international trade deficit increased to $36.4 billion in November, as imports increased more than exports. Bad, even if for all the right reasons.
Retail and food service sales for December were $353.0 billion, a decrease of 0.3 percent from the previous month. Bad.
Total business sales for November 2009 were up 2.0 percent from the previous month. Month end inventories were up 0.4 percent. Good.
Housing starts in December 2009 were at a seasonally adjusted annual rate 4.0 percent below November. More bad news from this sector.
The Consumer Price Index for All Urban Consumers (CPI-U) rose 0.1 percent in December. The indexes for food, energy, and all items less food and
energy all posted modest increases.
Nonfarm payroll employment edged down (-85,000) in December, and the unemployment rate was unchanged at 10.0 percent. Neutral; “edged down” is BLS-speak for not statistically significant.
The Producer Price Index for Finished Goods moved up 0.2 percent in December. Good.
The U.S. Import Price Index was unchanged in December. The price index for nonfuel imports increased 0.4 percent for the fifth consecutive month. The price index for nonagricultural exports advanced 0.5 percent in December after rising 0.6 percent in November. All good and well-behaved.
Real average hourly earnings did not change from November to December. A 0.2 percent increase in average hourly earnings for production and nonsupervisory workers was offset by a 0.2 percent increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). Neutral.
Consumer credit decreased at an annual rate of 8-1/2 percent in November. Bad; need to see some uptick as a sign that consumers are back to work.
Industrial production increased 0.6 percent in December. The gain primarily resulted from an increase of 5.9 percent in electric and gas utilities due to unseasonably cold weather. Manufacturing production edged down 0.1 percent, while the output of mines rose 0.2 percent. Thoroughly mixed.
One 2010 resolution is to make more frequent postings; another is to maintain a good news diffusion series based on reference dates in addition to the current index based on release dates. The release-based index is a sort of index of psychological inputs—the news that economic actors are getting. The somewhat more delayed reference date index will better synch to underlying conditions. I invite readers to keep me honest on both these resolutions.
The economy itself might have done well to adopt a resolution to keep up its end-of-year momentum. Instead, as January nears its end, the monthly good news index (GNI) is at 53.6, hung over well short of the breadth it had shown in January. There are five more reports to come this month, and it will take a .800 average to keep the GNI from slipping back to pre-November levels.
Summary of January releases to date:
Total construction activity for November 2009 0.6 percent below October 2009. Bad report from the weak sister sector.
New orders for manufactured goods rose 1.1 percent to $365.3 billion in November. Good.
November 2009 sales of merchant wholesalers were up 3.3 percent from the previous month. End-of-month inventories were up 1.5 percent. Both facts good at this point in the cycle.
The Nation's international trade deficit increased to $36.4 billion in November, as imports increased more than exports. Bad, even if for all the right reasons.
Retail and food service sales for December were $353.0 billion, a decrease of 0.3 percent from the previous month. Bad.
Total business sales for November 2009 were up 2.0 percent from the previous month. Month end inventories were up 0.4 percent. Good.
Housing starts in December 2009 were at a seasonally adjusted annual rate 4.0 percent below November. More bad news from this sector.
The Consumer Price Index for All Urban Consumers (CPI-U) rose 0.1 percent in December. The indexes for food, energy, and all items less food and
energy all posted modest increases.
Nonfarm payroll employment edged down (-85,000) in December, and the unemployment rate was unchanged at 10.0 percent. Neutral; “edged down” is BLS-speak for not statistically significant.
The Producer Price Index for Finished Goods moved up 0.2 percent in December. Good.
The U.S. Import Price Index was unchanged in December. The price index for nonfuel imports increased 0.4 percent for the fifth consecutive month. The price index for nonagricultural exports advanced 0.5 percent in December after rising 0.6 percent in November. All good and well-behaved.
Real average hourly earnings did not change from November to December. A 0.2 percent increase in average hourly earnings for production and nonsupervisory workers was offset by a 0.2 percent increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). Neutral.
Consumer credit decreased at an annual rate of 8-1/2 percent in November. Bad; need to see some uptick as a sign that consumers are back to work.
Industrial production increased 0.6 percent in December. The gain primarily resulted from an increase of 5.9 percent in electric and gas utilities due to unseasonably cold weather. Manufacturing production edged down 0.1 percent, while the output of mines rose 0.2 percent. Thoroughly mixed.
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