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.