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Economic News Summary April 2010
The depth, frozen credit markets and bailouts have all been unique symptoms of this recession.  However, the length of this recession may be its lasting legacy.  Since 1900, There have been 21 economic downturns or recessions in the United States, this includes the "Great Depression" in the 1930's.  Prior to World War II, the average recession lasted 19.1 months.

After World War II, the average length of a recession was 10.2 months.  Our current recession started in December 2007, which means we are in the 29th month, with no real end in sight as we approach three times the post WW II average.  The primary reason for going 29 months and counting? Uncertainty about the future.  The anti-business view of the current administration and its policies have descended like a thick fog on the business community, paralyzing decision making, expansion plans and capital investments and prolonging this recession. 

Consumer Price Index-Urban (CPI-U)
April 28, 2010

As a measure, inflation CPI increased slightly in April - up 0.06%.  Running at an annualized rate of 1%, which is significantly below the average of 2.6% over the past 10 years.  CPI does not include Food or Energy costs.  Oil and gas prices were both up in the past month.

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
April 28, 2010

Personal income rose at an annual rate of 3.1% during the 4th quarter.  At this rate, consumers will not be able to lead the economic recovery with increased spending.

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)
April 28, 2010

Personal consumption has stalled at an annual rate of 1.7% during the 4th quarter, typically the peak season for consumer spending.

Full Title: 1) 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.  2) Personal consumption expenditures: Percent Change From Preceding Period in Real Personal Consumption Expenditures by Major Type of Product: Percent; Seasonally adjusted at annual rates (quarterly)

Definition: Personal consumption expenditures (PCE).  The goods and services purchased by persons.

Civilian Unemployment Rate
April 28, 2010
The rate of 9.7% has been the same for the 5 months.  This means that either the index was not calculated properly or that the number of unemployed is moving out of the labor force at the same rate as layoffs occur.  If this is the case, then the underemployment number may be a significant economic indicator.

Definition: Civilian unemployment rate comes from a survey designed so that person age 16 and over that are neither in an institution nor on active duty in the Armed Forces is 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.)

Gross Domestic Product (GDP)
April 28, 2010
Gross domestic product for the 4th quarter has been revised downward from an annualized rate of 5.9% to 5.5%, and although still positive, indicates that the recovery is very shaky.  Industrial Production is the standard for measuring economic health.  Industrial production dropped, see below, indicating that the 1st quarter ending March 31st may be negative growth or the dip back into recession.  First quarter GDP numbers will be out later in April.  At this point GDP for the 1st quarter are still not available.

Full title: 1)  Gross domestic product: Real Gross Domestic Product, Chained Dollars: Billions of chained 2005 dollars; Seasonally adjusted at annual rates (quarterly).  2)  Quarterly Growth in real GDP at annual rates, as a percentage change.
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.

West Texas Intermediate (WTI)
April 28, 2010
The price of West Texas Crude jumped again increasing over 4% to $84.60.  Oil prices per barrel are up 8% in 2010.  If we annualized that rate... we don't even want to go there.

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.

Industrial Production (IP)
April 28, 2010
Industrial production dropped 91.8% on an annualized basis between January and February.  This monthly indicator is a component of GDP and may be a leading indicator for economic growth.  We know that consumers are not leading the recovery. A significant drop in industrial production indicates that the private sector is not leading the charge either.

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:

1. 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®.
2. Pink band indicates recessionary period.

Let me know if you have any comments, questions, or suggestions.
Write David W. Weatherholt at david@bnewsviews.com

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Definition from the Bureau of Economic Analysis (BEA)

Definition from the Bureau of Labor Statistics (BLS)

Definition from the Bureau of Economic Analysis (BEA)

Definition from the U.S. Energy Information Administration.