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.)
Friday, July 10, 2009
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.)
Wednesday, June 17, 2009
Approaching breakeven?
A veritable blizzard of statistical reports leaves the good news index at 47.1 percent thus far in June. Are we closing in on the 50 mark which would indicate that the good-news—bad-news ratio had broken even? If taht turns out to be so, I’ll start quoting some of my remarks of early December 2008.
Manufacturing corporations' after-tax profits averaged 3.2 cents per dollar of sales for the first quarter of 2009, up 8.2 cents from the average after-tax losses of 4.9 cents for the fourth quarter of 2008. Good news.
Privately-owned housing starts in May 2009 were at a seasonally adjusted annual rate of 532,000. This is 17.2 percent above April 2009. Obviously good news, even if this series has been very volatile lately.
The PPI increased 0.2 percent in May. This rise followed a 0.3-percent advance in April and a 1.2-percent decrease in March. Prices for finished goods other than foods and energy decreased 0.1 percent after rising 0.1 percent in April. Hard to imagine a better over-the-month report than this right now.
The Import Price Index increased for the third consecutive month in May, rising 1.3 percent. An 8.3 percent increase in petroleum prices was the primary contributor. The Export Price Index rose 0.6 percent. These top-side numbers are way too big to be comfortable, so even the relative calm in the non-petroleum import and non-agricultural export numbers and the firm pricing in their industrial supplies and materials lines don’t serve to promote the report to “mixed.”
CPI-U rose 0.1 percent in May after being unchanged in April. The index for all items less food and energy increased 0.1 percent in May after increasing 0.3 percent in April. Price stability is good.
Real average weekly earnings fell by 0.3 percent from April to May 2009. Wage erosion is bad.
Industrial production decreased 1.1 percent in May after having fallen a downward-revised 0.7 percent in April. The rate of capacity utilization for total industry declined further in May to 68.3 percent. Production declines are bad, without question. (But might the turn in the profits picture indicate that production is becoming more gainfully aligned with demand?)
Manufacturing corporations' after-tax profits averaged 3.2 cents per dollar of sales for the first quarter of 2009, up 8.2 cents from the average after-tax losses of 4.9 cents for the fourth quarter of 2008. Good news.
Privately-owned housing starts in May 2009 were at a seasonally adjusted annual rate of 532,000. This is 17.2 percent above April 2009. Obviously good news, even if this series has been very volatile lately.
The PPI increased 0.2 percent in May. This rise followed a 0.3-percent advance in April and a 1.2-percent decrease in March. Prices for finished goods other than foods and energy decreased 0.1 percent after rising 0.1 percent in April. Hard to imagine a better over-the-month report than this right now.
The Import Price Index increased for the third consecutive month in May, rising 1.3 percent. An 8.3 percent increase in petroleum prices was the primary contributor. The Export Price Index rose 0.6 percent. These top-side numbers are way too big to be comfortable, so even the relative calm in the non-petroleum import and non-agricultural export numbers and the firm pricing in their industrial supplies and materials lines don’t serve to promote the report to “mixed.”
CPI-U rose 0.1 percent in May after being unchanged in April. The index for all items less food and energy increased 0.1 percent in May after increasing 0.3 percent in April. Price stability is good.
Real average weekly earnings fell by 0.3 percent from April to May 2009. Wage erosion is bad.
Industrial production decreased 1.1 percent in May after having fallen a downward-revised 0.7 percent in April. The rate of capacity utilization for total industry declined further in May to 68.3 percent. Production declines are bad, without question. (But might the turn in the profits picture indicate that production is becoming more gainfully aligned with demand?)
Friday, June 12, 2009
Mixed revenue reports
The good news index (GNI) now stands at 40 percent as good news on last month’s retail revenue was offset by a weak report on April’s business (manufacturing and trade) sales.
Retail and food service sales for May reached $340.0 billion, an increase of 0.5 percent from April. Despite the facts that the gain was not widely diffused and included a price-driven increase in gas stations’ sales, this is undeniably good news.
U.S. total business sales for March were $966.8 billion, down 0.3 percent from April. Month-end inventories were $1,384.7 billion, down 1.1 percent. Despite the facts that the decline was considerably less steep than the previous month’s and that the inventory-to-sales ratio edged further down, a decline in sales is always bad news.
Retail and food service sales for May reached $340.0 billion, an increase of 0.5 percent from April. Despite the facts that the gain was not widely diffused and included a price-driven increase in gas stations’ sales, this is undeniably good news.
U.S. total business sales for March were $966.8 billion, down 0.3 percent from April. Month-end inventories were $1,384.7 billion, down 1.1 percent. Despite the facts that the decline was considerably less steep than the previous month’s and that the inventory-to-sales ratio edged further down, a decline in sales is always bad news.
Wednesday, June 10, 2009
Bad news on trade and services
Bad news from the international trade and U.S. services releases has driven the good news index below 40. The GNI now stands at 37.5.
Foreign trade deteriorated on both the export and import accounts and the net was an increase in the deficit—a bad news trifecta from this release.
The quarterly services report was pretty poor as the Census Bureau emphasized for the information sector. Information sector revenue for the first quarter of 2009 was $275.3 billion, a decrease of 0.9 percent from the fourth quarter of 2008. Although this report is on the list of principal federal economic indicators, not included in our news index because its format is too disaggregated and difficult to summarize.
Foreign trade deteriorated on both the export and import accounts and the net was an increase in the deficit—a bad news trifecta from this release.
The quarterly services report was pretty poor as the Census Bureau emphasized for the information sector. Information sector revenue for the first quarter of 2009 was $275.3 billion, a decrease of 0.9 percent from the fourth quarter of 2008. Although this report is on the list of principal federal economic indicators, not included in our news index because its format is too disaggregated and difficult to summarize.
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