Mish's Global Economic Trend Analysis Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Mish's Global Economic Trend Analysis

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: gregor_us who wrote (982)	3/2/2004 9:19:30 AM
From: mishedlo	Read Replies (1) of 116555

Factory Activity Decelerated In February Activity at the nation’s factories advanced in February but at a slower pace compared with the prior month according to the results of the ISM manufacturing survey. The Purchasing Managers’ Index fell 2.2 points to 61.4 in February. Indexes tracking production (63.9 vs. 71.1) and new orders (66.4 vs. 71.1) declined in February. These indexes are off from their recent highs. Among the other indexes, there are two noteworthy aspects. (1) The employment index increased 3.4 points to 56.3, marking the fourth consecutive monthly reading above 50.0. However, we are yet to see any pickup in factory payrolls. Historically the year-to-year change in factory payroll employment and the ISM employment index (see chart 2) have a positive correlation. It appears that this historical relationship has not held as closely as in the past. Chart 2 indicates that on previous occasions the current level of the employment index corresponded with gains in factory employment. The February employment report is scheduled for publication on March 5. (2) The second interesting issue is the escalation of the vendor deliveries index and the price index, both of which are proxies for inflationary pressures. The vendor delivery index rose 1.7 points to 62.1, the best reading since January 1995. The price index shot up six points to 81.5 in February, the highest mark since January 1995. The sum of both these index is 143.6 in February. As chart 3 shows the Greenspan Fed was tightening monetary policy well before the sum of these harbingers of inflation were close to the current level (143.6). The Fed is exceedingly patient according to these historical indicators of inflation. Consumer Spending Edges Up January Personal income increased 0.2% in January but tax cuts lifted disposable income in January. Disposable personal income advanced 0.8% in January vs. a 0.3% gain in the previous month. Consumer spending rose 0.4% in January compared with a 0.5% increase in the prior month. After adjusting for inflation, consumer spending edged up 0.1% in January vs. a 0.3% increase in December. Consumer spending in the first quarter is predicted to post a 3.3% seasonally adjusted annualized increase. Tax refunds are expected to support consumer spending in the first-half of the year. Construction Outlays Slowed In January Construction spending dropped 0.3% in January, the first monthly decline since April 2003. Within the private sector, construction expenditures in the residential sector held steady but non-residential construction outlays dropped 1.7%. Public sector construction expenditures rose 0.2% in January after a 0.4% drop in the prior month. Looking ahead, it appears that residential construction spending is likely to add to first quarter GDP, while non-residential spending is predicted to subtract from GDP growth in the first quarter ntrs.com

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next