The ISM survey clearly promises much bigger increases in production ahead, but for now the official data are lagging the survey a bit, |
The January revision is mostly due to the plunge in aircraft orders reported in the durable-goods numbers. In February, the index was pulled down by lower consumer confidence, higher jobless claims, shorter delivery times and lower building permits. |
The key number in this report, in our view, is the rise in the supply of homes for sale. There are now 14.4 percent more homes for sale than a year ago, while actual sales are up just 3.3 percent. With mortgage demand slipping a bit and supply rising, price gains cannot continue at their current pace. |
The key point is that the deficit is being easily financed. |
The key question now is how quickly it recovers, |
The labor market is tightening, but the tightening is not accelerating. |
The March Beige Book paints a clear picture of an economy straining at the seams. Significantly, compared to recent Beige Books, there was more detail, and a more worrying tone, to the comments on the labor market. |
The message from these claims numbers is strong and clear. The labor market is extremely tight. |
The mystery is how to square with this with both the Redbook and Bloomberg chain store sales surveys, which pointed to a huge gain, ... Maybe it will come in March, or today's numbers will be revised up. Either way, this is a brief diversion, not a change of course. |
the need for higher rates may now be even greater than before the storm. |
The new Fed Chairman clearly expects to have to raise rates a bit further, but the extent of the tightening is dependent on the relative performance of the labor and housing markets. |
The only soft spots in the survey remain inventories and employment, but they will recover. |
The pattern in claims in recent months is strikingly similar to 1990 -- a long slow climb and then a sudden acceleration as layoffs accelerated, |
The pattern in claims in recent months is strikingly similar to 1990 -- a long slow climb and then a sudden acceleration as layoffs accelerated. |
The price index was up, ... This reflects the rise in oil prices and not much else, but that won't stop doom-mongers worrying about it. In short, the report shows manufacturing is still on track. |