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.
Friday, March 26, 2010
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).
Subscribe to:
Posts (Atom)