Economic Summary
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The worst recession since the Great Depression may now be officially over, due in large part to the overall resiliency of the U.S. economy. This recession began quietly in the fourth quarter of 2007 and moved into a total free-fall by the third quarter of 2008. Slowly, the economy has inched its way out of the crater. By the fourth quarter of 2009 is standing, like a dazed fighter, on the crest of what may be an economic recovery. In its weakened state, the economy will continue to shed jobs. However, the greater fear is that all of the extra money used to stimulate the economy will create inflation. The attached charts provide a glimpse at some key economic indicators. Pay close attention to CPI-U for signs of inflation and GDP for signs of continued economic growth.
Consumer Price Index-Urban (CPI-U)
November 18, 2009
On a seasonally adjusted basis, CPI-U rose 0.3% in October. The index has decreased 0.2% over the last 12 months on a not seasonally adjusted basis.
Full Title: All Urban Consumers - (CPI-U): U.S. city average: All items: 1982-84=100
Definition: Monthly data on changes in the prices paid by urban consumers for a representative basket of goods and services. All Items Less Food and Energy.
Personal Income
November 18, 2009
Personal income stood at 11,956.3 in the 3Q, dropping a mere 0.13% from the 2Q. It is down 2.7% from 3Q of 2008. This means that consumers have less money to spend than last year.
Full Title: Personal income: Personal Income and Its Disposition: Billions of dollars; Seasonally adjusted at annual rates (quarterly)
Definition: Personal income. Income received by persons from all sources. It includes income received from participation in production as well as from government and business transfer payments. It is the sum of compensation of employees (received), supplements to wages and salaries, proprietors' income with inventory valuation adjustment and capital consumption adjustment, rental income of persons with CCAdj, personal income receipts on assets, and personal current transfer receipts, less contributions for government social insurance.
Personal Consumption Expenditures (PCE)
November 18, 2009
Personal consumption expenditures reached 9,265.1 in the 3Q a 0.83% upward change from 2Q and down 0.3% from 3Q 2008. Spending more than you take in cannot go on much longer, especially with credit tightening.
Full Title: Personal consumption expenditures: Real Personal Consumption Expenditures by Major Type of Product, Chained Dollars: Billions of chained 2005 dollars; Seasonally adjusted at annual rates (quarterly)
Definition: Personal consumption expenditures (PCE). The goods and services purchased by persons.
Civilian Unemployment Rate
November 18, 2009
Unemployment went from 9.8% to 10.2% or a percentage increase of over 4% in one month. As a lagging indicator, this is not unexpected. What this really means is the personal income with continue to drop, preventing personal consumption from increasing and leaving consumers out of the recovery.
Definition: Civilian unemployment rate comes from a survey designed so that persons aged 16 and over that are neither in an institution nor on active duty in the Armed Forces are counted and classified in only one group. The sum of the employed and the unemployed constitutes the civilian labor force. Persons not in the labor force combined with those in the civilian labor force constitute the civilian noninstitutional population 16 years and over. (There is no upper age limit.)
West Texas Intermediate (WTI)
November 18, 2009
The price of West Texas Crude ended October at $75.80 per barrel up from $69.50 in September or a one-month percentage change of 9.1%. The price is down from October 2008 rate of $76.76 per barrel.
Full Title: Price of West Texas Intermediate Crude; Monthly NSA, Dollars Per Barrel
Definition: West Texas Intermediate (WTI) crude oil is of very high quality and is excellent for refining a larger portion of gasoline. WTI is the major benchmark of crude oil in the Americas. WTI is generally priced at about a $5 to $6 per-barrel premium to the OPEC Basket price and about $1 to $2 per-barrel premium to Brent, although on a daily basis the pricing relationships between these can vary greatly.
Gross Domestic Product (GDP)
November 18, 2009
GDP finished the 3Q at 13,014, increasing from 12,901.5 in 2Q or a percentage change over the quarter of 0.87%. This slight increase ended four straight quarters of declining GDP and may be signaling the end of the recession. It has been widely reported that the 0.87% equals an annualized rate of 3.5%.
Full title: Gross domestic product: Real Gross Domestic Product, Chained Dollars: Billions of chained 2005 dollars; Seasonally adjusted at annual rates (quarterly)
Definition: Gross domestic product (GDP) price index. Measures the prices paid for goods and services produced by the U.S. economy and is derived from the prices of personal consumption expenditures (PCE), gross private domestic investment, net exports of goods and services, and government consumption expenditures and gross investment.
Industrial Production (IP)
November 18, 2009
Industrial production increased to 98.5 from 97.8 or a one-month percent change of 0.7%. 
Full Title: Industrial Production Index: Index 2002=100: SA
Definition: Industrial production (IP) includes output, capacity, and capacity utilization in the U.S. industrial sector, which is defined by the Federal Reserve to comprise manufacturing, mining, and electric and gas utilities.
NOTES:
- This summary contains some quarterly indicators such as personal income, real personal consumption, and gross domestic product and may not have changed from the last issue of B/N&V®.
- Pink band indicates recessionary period.
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Library of Congress Cataloging-in-Publication
Business/News & Views® / by David. W. Weatherholt
ISBN: 978-0-9823041-1-2 (electronic format)
Published in the United States of America through www.waconsult.com
Published in an electronic format by Weatherholt & Associates, LLC
First Trade Publishing: October 2008
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