Today was one of those days when everybody released their economic news at the same time.The Commerce Department's Bureau of the Census caught up on some of the data that was delayed by the government shutdown by releasing reports on Manufacturers' Shipments, Inventories, and Orders covering November and December.
New orders were up 1.3% in December following a drop of 0.1% in November. But, the highly variable orders for aircraft and aircraft parts contributed largely to the numbers for both months. Excluding the transportation sector, factory orders were only up 0.8% in December and the November decline was 0.7%. Year-over-year gains in new orders have been trending downward since the second half of 1994. For all of 1995, orders rose 6.6%. This compares with a rise of 10.3% in 1994.
Also today, Commerce released its December report on business activities at the wholesale level. You may recall that the Wholesale Trade report for November came out last Friday.
During December, wholesalers were able to make further progress in working down some of the inventories they had accumulated during the preceding several months. In December, wholesale inventories dropped by 0.7%, the largest monthly decline since December 1986. This followed a revised decline of 0.3% during November.
Wholesale sales rose by 1.4% in December following a rise of 1.2% in November. The December gain was the largest in a year.
The inventory-to-sales ratio, which shows how many months it would take to dispose of current inventories at the current sales rate, declined from a revised figure of 1.34 in November to 1.31 in December.
Also today, the Philadelphia Federal Reserve bank released the February issue of its Business Outlook Survey. While the survey's general business and new orders indexes improved over last month, both indexes were essentially neutral (3.8 and 2.9 on a scale that runs from -100 to +100). Unfilled orders and delivery times improved -- an indication of reduced demand. The indexes for employment and average workweek both fell. And, the indexes for current prices paid and current prices received both hit 28-year lows. No signs of inflation in Philadelphia.
Meanwhile, back in Washington, the Labor Department reported that the number of new claims for unemployment insurance rose 21,000 to 387,000 during the week ended February 10. The four-week moving average of the weekly data rose to 388,500 -- the highest it has been since July 22. This latest 4-week moving average figure is 18% higher than a year ago.
Finally, let's take a look at the results of yesterday's weekly ABC News/Money Magazine consumer confidence poll. (You can read the complete report on this by going to keyword ABC, right here on AOL)
This week's ABC/Money Consumer Comfort Index reading was -18. The Comfort Index is obtained by adding together the positive and negative responses to three survey questions on the economy and then dividing by three. This week 68% of those polled rated the national economy negatively, 56% were feeling good about their personal finances, and 65% were reluctant to make new purchases. So, calculating the Index, we obtain: (32-68+56-44+35-65)/3=-18.
To put this week's results in perspective you have to realize that, since the ABC/Money survey began back in 1985, no more than 50% of the survey respondents have ever rated the national economy positively. The all-time-best rating on personal finances was +62%/-38%. And the best-ever reading on the buying climate was +52%/-48%. Of course all of these readings didn't occur at the same time. But, if they did, they would have yielded a Consumer Comfort Index reading of a little more than 9. Conversely, if the worst readings in each of the three categories were combined together, the Index value would be -54. The lifetime averages for each of the three components are -70%, +54%, and -66%. This yields an Index of -21.
So, one possible interpretation of this week's index might be that it is slightly upbeat. That is, -18 is slightly more positive than a reading of -21.
Byline: Lafferty (MF Merlin)