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.
Friday, January 29, 2010
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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