Printer Friendly
View as PDF

Economic News Summary March 2010
Many of the economic indicators making up the B/NV® monthly summary either remained the same or have gotten worse in just one month.  This indicates that our "Slow Motion Recovery" may have actually stopped, possibly indicating we may be headed for a double-dip recession.  The current recession started in December 2007 and is now the longest running recession since 1947.  The $13 trillion U.S. economy is resilient but recovery is being prolonged by uncertainty.

Consumer Price Index-Urban (CPI-U)
March 30, 2010
As a measure of inflation, CPI did not change between January and February of this year.  It is running at an annualized rate of 2%, which is below the average of 2.6% over the past 10 years.  It should be noted that 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

Personal Income
March 30, 2010
Personal income rose at an annual rate of 3.7% during the 4th quarter.  This anemic growth rate of personal income will not embolden consumers to lead the economic recovery with additional spending.

 Full Title: Personal income: Personal Income and Its Disposition: Billions of dollars; Seasonally adjusted at annual rates (quarterly)

Personal Consumption Expenditures (PCE)
March 30, 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)

Civilian Unemployment Rate
March 30, 2010
This index has me puzzled.  The February rate of 9.7% is the same as January.  The job loss figures were still negative, meaning job loss outpaced job gains for the month.  This can only mean 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 significant economic indicator.

Gross Domestic Product (GDP)
March 30, 2010
Gross domestic product for the 4th quarter was at an annualized rate of 5.9%, a respectable growth rate.  Industrial 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. 

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.

West Texas Intermediate (WTI)
March 30, 2010
The price of West Texas Crude jumped to over eighty dollars per barrel to $81.20, a 6.3% increase in a single month.  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

Industrial Production (IP)
March 30, 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, and 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

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

Copyright © 2010 Weatherholt & Associates, LLC all rights reserved worldwide.
Business/News & Views® is a registered trademark of Weatherholt & Associates, LLC

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.

  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.

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

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.)

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.

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.

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.