Cautious optimism remains the theme for the economy in 2010. Slow but steady improvement is being seen in several sectors, yet the latest round of earnings reports demonstrate a hesitation to proclaim the U.S. and global economies have entered the recovery phase.
Last month, Donald A. Norman, an economist for the Manufacturers Alliance/MAPI, referred to the economy having been in “rehab” during the last quarter, while now it “finally appears to be on the road to recovery.”
Indeed, manufacturing – one of the hardest hit sectors during this recession – began posting some positive numbers.
According to the Bureau of Labor Statistics, manufacturing added 11,000 jobs in January. And manufacturing production rose 1 percent, according to the Federal Reserve Board.
While the gains may be small, they may signify an end to the precipitous declines over the past two years.
Other key numbers from the past month:
Wholesale prices rose 1.4 percent in January, seasonally adjusted, the U.S. Bureau of Labor Statistics reported. At the earlier stages of processing, prices received by manufacturers of intermediate goods climbed 1.7 percent, and the crude goods index jumped 9.6 percent. On an unadjusted basis, prices for finished goods moved up 4.6 percent for the 12 months ended January 2010, their third consecutive 12-month increase.
The Conference Board Leading Economic Index for the U.S. increased 0.3 percent in January, marking the tenth consecutive increase for the LEI. The Coincident Economic Index rose 0.2 percent in January, while the Lagging Economic Index declined 0.1 percent.
Industrial production increased 0.9 percent in January following a gain of 0.7 percent in December. The capacity utilization rate for total industry rose 0.7 percentage point to 72.6 percent, a rate 8.0 percentage points below its average from 1972 to 2009.
The Purchasing Managers Index rose to 58.4 percent, its highest level since August 2004, according to the latest Manufacturing ISM Report on Business. Both the New Orders and Production indexes were above 60 percent for the industry. The Inventories Index for January was at 46.5 percent.
The U.S. Census Bureau and the Department of Housing and Urban Development reported privately-owned housing starts in January were at a seasonally adjusted annual rate of 591,000, 2.8 percent above the revised December estimate of 575,000 and 21.1 percent above the January 2009 rate. Single-family housing starts were at a rate of 484,000, 1.5 percent above the revised December figure of 477,000.
December U.S. manufacturing technology consumption was $219.60 million, according to the Association for Manufacturing Technology and the American Machine Tool Distributors’ Association. This total was up 22.9 percent from November but down 5.7 percent from the total of $232.93 million reported for December 2008. With a year-to-date total of $1,771.91 million, 2009 is down 60.4 percent compared with 2008.
Construction spending in December 2009 was estimated at a seasonally adjusted annual rate of $902.5 billion, 1.2 percent below the revised November estimate. The December figure is 9.9 percent below December 2008. The value of construction in 2009 was $939.1 billion, 12.4 percent below the $1,072.1 billion spent in 2008.
Canadian manufacturing sales rose 1.6 percent in December to $43 billion. The gains were mostly concentrated in the transportation equipment industry. This was the sixth increase in overall manufacturing sales in seven months. Sales advanced in 11 of the 21 manufacturing industries for December.
Canadian contractors took out $6.2 billion in building permits in December, up 2.4 percent from November and 32.6 percent higher than in December 2008.
In December, Canada’s Industrial Product Price Index and the Raw Materials Price Index fell 0.1 percent and 1.7 percent respectively, pulled down by lower petroleum prices.