U.S. producers received $352.2 billion US worth of new orders in month two of 2009, an increase of 1.8 per cent month over month.
The majority of economists were wrong and had predicted a smaller gain.
Chart Source: EconodayBetter still, orders for non-defence capital goods moved up by 7.1 per cent.
On the employment front, Challenger, Gray & Christmas Inc. reported that the number of planned job cuts announced in March declined for the second straight month.
Layoff announcements by U.S. employers declined 19.3% from February's 186,350 job cuts, which was also down from the January layoff reports.
The March corporate downsizing figures were the lowest since October.
Chart Source: Calafia Beach PunditThe flurry of recent good news has the stock market moving higher and Thursday was no exception.
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Why does the unemployment rate keep going up if the planned layoffs are declining?
ReplyDeleteAnonymous,
ReplyDeleteGreat question. The reason is that there is a lag in time between when a person is laid off and when they actually file for unemployment... typically 6 to 8 weeks and sometimes longer.
So some folks now that were laid off in Jan/Feb are just now applying (initial claims). In the next several weeks (6-8) you will likely start to see "initial claims" numbers begin to fall in response to the layoff declines.
GNE
I know we should be greatful for all the good news this week and shouldn't expect every statistic to move up, but is the ISM non-manufacturing decline more troublesome since we are basically a service economy?
ReplyDeleteI am not too worried about the non-manufacturing index's slight decline. What is more encouraging is that the manufacturing index is continuing to show that GDP in Q1 is most likely to be only -1.5 +/- 1%... that is compared to a dip of -6.2% in Q4. Remember we are still looking for slight declines in Q1 and Q2... Jan-Jun and then a return to growth numbers in July (reported in Aug)...
ReplyDeleteThe good news in the non-manufacturing report is that 8 of 18 industries will derive benefit from the stimulus bill... that benefit yet to bloom...
As "bad" as the 4th quarter GDP numbers were, if you compare 2007 GDP to 2008 GDP (per the Govt's own website), GDP actually rose 1%.
ReplyDeleteI have to admit that I am very worried about high inflation when things start to move again. I hear words like massive inflation, hyper inflation. I also here some people argue there won't be much inflation. What am I to make of this and what should I do to prepare myself?
ReplyDelete...my inflation comment (above) is with regard to the massive amount of money the FED has been printing, etc.
ReplyDelete@Anonymous,
ReplyDeleteI agree that it will be a challenge to keep inflation in check. But I am certain that the team will have more time to "unwind" their actions than the time that they had to react swiftly to the crisis in Oct. No doubt they have done everything with an eye to how to undo it at the appropriate time.
GNE
At this point I don't know about inflation. But
ReplyDeletethe GDP can only be in contraction. With auto sales down 35-40%, presently. And auto sales down in Q4 taking 2 percentage points. At the very least Q1 will be also be down. Home sales down again. Retail sales also down. High unemployment. It is more than likely Q1, 2009 will be in contraction. The stock market could be headed for another major bubble that will burst.