Sunday, September 9, 2012

The Latest Data Looks Good, But Unemployment And Manufacturing Are Huge Concerns

The big monthly news this week was yesterday's positive but lousy employment report, showing a miserable 96,000 jobs being added in August (but see Lee Adler's interesting analysis indicating that this was the best August report NSA in years, defeated by an unusually heavy seasonal adjustment downwards), and a decline in the unemployment rate to 8.1% driven entirely by a decline in the labor force (the reasons for which are hotly contested). Construction spending, both residential and commercial, was also down. The ISM manufacturing index showed slight contraction for the third straight month. Labor costs were revised downward. On the upside, the ISM services index showed expansion, and we had the best month of vehicle sales in over 4 years.

The high frequency weekly indicators which ought to show turns before they show up in monthly or quarterly data, however, were generally more positive, with a few exceptions, most especially gas prices, so let's start once again with those.

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