Housing construction stalled in July. The overall diffusion of good news from the Principal Federal Economic Indicators has been three parts good to two parts bad so far this month.
Privately-owned housing starts in July 2009 were at a seasonally adjusted annual rate of 581,000; this is 1.0 percent below June. Bad news, albeit not statistically significant--rated zero.
Friday, August 21, 2009
Friday, August 14, 2009
Halfway up the ladder, or halfway down the hole?
About two-thirds of the economic news released recently by the principal Federal economic indicators has been good and the good news diffusion index (GNDI) stands at 65.4 halfway through August. Of course, the dismal view is that this is may be marking a recession-ending scenario that “only an economic statistician could love.” My good friend Larry Mishel was quoted as saying that the non-statistician would call the recession over only when we have completely escaped the hole we have fallen (or been pushed) into.
My own feeling is the good news starts when we find out that there is, indeed, a ladder on the other side of the hole. In fact, the next set of policy challenges is likely to be sorting out which of the many ladders we have been offered are worth keeping.
The Nation's international deficit in goods and services increased to $27.0 billion in June from $26.0 billion (revised) in May, as imports increased more than exports. Bad news on the topside and just a flicker of life in general details; rated a zero.
U.S. retail and food service sales for July reached $342.3 billion, a decrease of 0.1 percent from the previous month. No decline is good; rated zero.
U.S. total business sales for June were $975.8 billion, up 0.9 percent from last month. Month-end inventories were $1,350.0 billion, down 1.1 percent from last month. Both measures in desirable directions and statistically significant quantities; rated one.
On a seasonally adjusted basis, the CPI-U was unchanged in July. The index for all items less food and energy increased 0.1 percent in July after increasing 0.2 percent in June. Stability is the good news in a price measure; rated one.
Real average weekly earnings rose by 0.4 percent from June to July 2009. This increase stemmed from a 0.3 percent increase in average weekly hours and a 0.2 increase in average hourly earnings. The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) was unchanged. Unspectacular growth, but growth gets rated one.
Industrial production increased 0.5 percent in July. Aside from a hurricane-related rebound in October 2008, the gain in July marked the first monthly increase since the recession began in December 2007. Rated one.
My own feeling is the good news starts when we find out that there is, indeed, a ladder on the other side of the hole. In fact, the next set of policy challenges is likely to be sorting out which of the many ladders we have been offered are worth keeping.
The Nation's international deficit in goods and services increased to $27.0 billion in June from $26.0 billion (revised) in May, as imports increased more than exports. Bad news on the topside and just a flicker of life in general details; rated a zero.
U.S. retail and food service sales for July reached $342.3 billion, a decrease of 0.1 percent from the previous month. No decline is good; rated zero.
U.S. total business sales for June were $975.8 billion, up 0.9 percent from last month. Month-end inventories were $1,350.0 billion, down 1.1 percent from last month. Both measures in desirable directions and statistically significant quantities; rated one.
On a seasonally adjusted basis, the CPI-U was unchanged in July. The index for all items less food and energy increased 0.1 percent in July after increasing 0.2 percent in June. Stability is the good news in a price measure; rated one.
Real average weekly earnings rose by 0.4 percent from June to July 2009. This increase stemmed from a 0.3 percent increase in average weekly hours and a 0.2 increase in average hourly earnings. The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) was unchanged. Unspectacular growth, but growth gets rated one.
Industrial production increased 0.5 percent in July. Aside from a hurricane-related rebound in October 2008, the gain in July marked the first monthly increase since the recession began in December 2007. Rated one.
Tuesday, August 11, 2009
Post (computer) crash developments
Sorry about the long absence. My computer crashed, was resuscitated, then crashed again. I have made enough transfers from the old drive to get the blog back on it’s feet and I’m waiting for the call from the repair shop to see how much else I’ll be able to restore.
While I wasn’t watching closely, the good news diffusion index (GNDI), a measure of what proportion of the news coming out of the Principal Federal Economic Indicators system is “good news,” as determined by the baldest possible reading of the various reports’ leading paragraphs and figures, edged back a little to 47.1 percent in July.
In early August, the index has gotten off to its best start yet. I’ll give specific figures after a few more of the numbers have come out.
Our proprietary composite index of labor market conditions dropped a bit further in July, but the decline was the smallest since February 2008 when the recession was just getting under official way.
The index had actually reached its peak at 102.8 (2007=100) in December 2006, fully a year before the recession began. This long lead at peaks and equally long lag at troughs has been a feature of the index’s performance in recent recessions. When it was constructed its average lead or lag was about a quarter, rather than a year or more. There’s a paper in that somewhere.
While I wasn’t watching closely, the good news diffusion index (GNDI), a measure of what proportion of the news coming out of the Principal Federal Economic Indicators system is “good news,” as determined by the baldest possible reading of the various reports’ leading paragraphs and figures, edged back a little to 47.1 percent in July.
In early August, the index has gotten off to its best start yet. I’ll give specific figures after a few more of the numbers have come out.
Our proprietary composite index of labor market conditions dropped a bit further in July, but the decline was the smallest since February 2008 when the recession was just getting under official way.
The index had actually reached its peak at 102.8 (2007=100) in December 2006, fully a year before the recession began. This long lead at peaks and equally long lag at troughs has been a feature of the index’s performance in recent recessions. When it was constructed its average lead or lag was about a quarter, rather than a year or more. There’s a paper in that somewhere.
Friday, July 10, 2009
July looks stronger now
With seven of the nineteen indicators I expect to see reported this month out, the diffusion index of good news is at 42.9 for July. While this is below the final for June, it is ahead of the pace set in the early third of that month.
The Nation's international deficit in goods and services decreased to $26.0 billion in May from $28.8 billion in April, as exports increased and imports decreased. (A classic good, from the producers’ side.)
The U.S. Import Price Index rose 3.2 percent in June led by higher petroleum prices. The June increase followed a 1.4 percent advance in May. Export Prices also increased in June, rising 1.1 percent after advancing 0.5 percent in the previous month. (While firm pricing is nice for some at this economic juncture, these price rises are just too big. Bad news.)
The Nation's international deficit in goods and services decreased to $26.0 billion in May from $28.8 billion in April, as exports increased and imports decreased. (A classic good, from the producers’ side.)
The U.S. Import Price Index rose 3.2 percent in June led by higher petroleum prices. The June increase followed a 1.4 percent advance in May. Export Prices also increased in June, rising 1.1 percent after advancing 0.5 percent in the previous month. (While firm pricing is nice for some at this economic juncture, these price rises are just too big. Bad news.)
Thursday, July 9, 2009
Keeping up the (slowly improving) pace
Mixed bag over the past couple of days. By the end of the week, it will be a useful exercise to calculate the good news index (GNI). As of today, only five of the more than 20 reports have been released. At this point, we’re keeping pace with last month.
Consumer credit decreased at an annual rate of 1-1/2 percent in May 2009. Revolving credit decreased at an annual rate of 3-3/4 percent, and nonrevolving credit decreased at an annual rate of 1/4 percent. (Still bad. Consumers still retrenching.)
May 2009 sales of merchant wholesalers were $311.3 billion, up 0.2 percent from last month. End-of-month inventories were $402.2 billion, down 0.8 percent. (Good. Both sides contribute to continued decline in the inventory-to-sales ratio.)
Consumer credit decreased at an annual rate of 1-1/2 percent in May 2009. Revolving credit decreased at an annual rate of 3-3/4 percent, and nonrevolving credit decreased at an annual rate of 1/4 percent. (Still bad. Consumers still retrenching.)
May 2009 sales of merchant wholesalers were $311.3 billion, up 0.2 percent from last month. End-of-month inventories were $402.2 billion, down 0.8 percent. (Good. Both sides contribute to continued decline in the inventory-to-sales ratio.)
Thursday, July 2, 2009
More red glare than early light
July sputters off to a weaker start than did June, but hey, there’s a holiday and a chance to rest, relax, and regroup before next Wednesday’s report on consumer credit. Have a great Fourth, but don’t propose any victory toasts quite yet.
Total construction activity for May 2009 was 0.9 percent below April 2009. This broke a very modest winning streak for this indicator. (Bad news. I’m still intrigued though by the strength in the construction of manufacturing facilities.)
New orders for manufactured goods in May increased $4.1 billion or 1.2 percent to $347.9 billion. (Good news—and the reason I’m intrigued by the factory-building boomlet.)
Nonfarm payroll employment continued to decline in June, falling by 467,000, and the unemployment rate was little changed at 9.5 percent. (Obviously bad, especially as the unemployment rate was “little changed” from 9.4 percent.)
Our proprietary index of labor market conditions dropped 2.2 percent in June. The gap between the index and its trailing six-month moving average edged down a bit, even so. As we noted recently, a trough in the index-moving-average gap has been associated quite closely with the trough in the business cycle.
Total construction activity for May 2009 was 0.9 percent below April 2009. This broke a very modest winning streak for this indicator. (Bad news. I’m still intrigued though by the strength in the construction of manufacturing facilities.)
New orders for manufactured goods in May increased $4.1 billion or 1.2 percent to $347.9 billion. (Good news—and the reason I’m intrigued by the factory-building boomlet.)
Nonfarm payroll employment continued to decline in June, falling by 467,000, and the unemployment rate was little changed at 9.5 percent. (Obviously bad, especially as the unemployment rate was “little changed” from 9.4 percent.)
Our proprietary index of labor market conditions dropped 2.2 percent in June. The gap between the index and its trailing six-month moving average edged down a bit, even so. As we noted recently, a trough in the index-moving-average gap has been associated quite closely with the trough in the business cycle.
Break out the near-beer!
As June came to a close, our index of good news diffusion flirted with and finally surpassed, however briefly, the 50 percent mark. For June’s releases, good news edged out the bad and the good news index (GNI) closed at 52.4. Celebrations were muted as analysts waited for at least another month’s worth of data.
After-tax profits for retailers averaged 1.7 cents per dollar of sales for the first quarter of 2009, up 2.0 cents from the after-tax losses average of 0.3 cents for the fourth quarter of 2008. (Profits are good, moving from losses to profits is good.)
New orders for manufactured durable goods increased 1.8 percent to $163.9 billion in May. (Good. Even better when three of the past four readings have been good; but still accompanied by declines in shipments, particularly in transportation equipment.)
Sales of new one-family houses in May 2009 were at a seasonally adjusted annual rate of 342,000, down 0.6 percent from April. (Bad. Housing-related sectors still struggle to build a foundation for growth.)
Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- decreased at an annual rate of 5.5 percent in the first quarter of 2009. (Bad, obviously, but less bad than both the last quarter of 2008 and earlier estimates of the first quarter of 2009.)
Personal income increased 1.4 percent and disposable personal income increased 1.6 percent in May. Personal consumption expenditures increased $25.1 billion, or 0.3 percent. (Good. We consumers are becoming less of an anchor.)
After-tax profits for retailers averaged 1.7 cents per dollar of sales for the first quarter of 2009, up 2.0 cents from the after-tax losses average of 0.3 cents for the fourth quarter of 2008. (Profits are good, moving from losses to profits is good.)
New orders for manufactured durable goods increased 1.8 percent to $163.9 billion in May. (Good. Even better when three of the past four readings have been good; but still accompanied by declines in shipments, particularly in transportation equipment.)
Sales of new one-family houses in May 2009 were at a seasonally adjusted annual rate of 342,000, down 0.6 percent from April. (Bad. Housing-related sectors still struggle to build a foundation for growth.)
Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- decreased at an annual rate of 5.5 percent in the first quarter of 2009. (Bad, obviously, but less bad than both the last quarter of 2008 and earlier estimates of the first quarter of 2009.)
Personal income increased 1.4 percent and disposable personal income increased 1.6 percent in May. Personal consumption expenditures increased $25.1 billion, or 0.3 percent. (Good. We consumers are becoming less of an anchor.)
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