Have you checked the size of your heart lately-- I suspect it may be two sizes too small. You're a mean one, Mr. Green.
Posted on 11/14/2003 3:58:16 PM PST by Willie Green
For education and discussion only. Not for commercial use.
WASHINGTON (Reuters) - A mixed batch of data on Friday suggested the U.S. economy was slowing from its torrid third-quarter pace, but analysts said the recovery still appeared on track for solid fourth-quarter growth.
Retail sales dipped, wholesale prices soared, and industrial output inched higher in October, while consumer moods brightened in November, reports showed.
But much of the data was skewed by an easing in auto sales incentives -- and sales and production were stronger and prices better contained when auto-related figures were excluded.
"We've past the liftoff phase and we're starting to move into sustainable orbit," said David Resler, chief economist at Nomura Securities.
The U.S. economy surged at a 7.2 percent annual rate in the third quarter and most economists expect it to settle into a more reasonable growth rate of around 4 percent in the current quarter, largely because of a slowdown in consumer spending.
Stock prices fell as the mixed data triggered caution on Wall Street. But bond prices rose as traders seemed to welcome signs the economy was moderating and showed little concern over what was viewed as a one-off spike in wholesale prices.
In a report showing a second straight month of declining consumer activity after surges in July and August, the Commerce Department said retail sales fell 0.3 percent last month.
The slide, which was slightly larger than the 0.2 percent drop expected by Wall Street, came as auto sales fell 1.9 percent. Excluding the weak autos, sales rose 0.2 percent, matching analysts' forecasts.
"Consumers have taken a breather ... but consumer spending is by no means collapsing," said Lynn Reaser, chief economist at Banc of America Capital Management in St. Louis.
AUTOS DRIVE PRICES UP
A separate report from the Labor Department showed an unexpectedly large surge in wholesale prices.
The Producer Price Index rose 0.8 percent in October, reflecting the largest gain in food prices since January 1984 and vehicle prices, which spiked with the introduction of new models.
The so-called core rate, which strips out volatile food and energy prices, increased a sharp 0.5 percent, but was up just 0.2 percent when vehicle prices were stripped out.
Car prices rose 1.6 percent and prices for small trucks and SUVs soared 3.4 percent, their biggest jump since October 1985. But automakers have already begun escalating end-of-year deals, which will drag prices lower.
Food prices climbed 2.2 percent on the biggest spike in beef and veal prices since January 1974. Analysts said the gain reflected a drop in imports of cattle from Canada, where a case of mad cow disease was found earlier this year.
Overall, economists said the report offered signs that a strengthened recovery was helping companies raise prices a bit, which could help boost profits.
It also might lessen concern at the Federal Reserve over the risk of already-low inflation drifting undesirably lower, they said.
FEEL BETTER YET?
Recent signs of a quickening pace of economic growth and job gains, appears to have lifted consumer spirits.
The University of Michigan's preliminary index of consumer sentiment for November released on Friday hit 93.5, its highest level since May 2002, market sources said. This was well above October's final reading of 89.6.
The survey's current conditions index rose to 102.8 from 99.9 and the expectations index, which tracks perceptions about the economy over the next 12 months, jumped to 87.6 from 83.0.
"The November results are significant because they show a breakout on the upside. At 93.5 we have moved into optimistic territory," said Richard DeKaser, chief economist at National City Corp. in Cleveland, Ohio.
Analysts said improving employment prospects likely played a role in boosting confidence.
U.S. employers added 286,000 workers to their payrolls in August through October, the best three-month performance since before the economy entered recession in 2001.
(Additional reporting by Andrea Hopkins in Washington and Ros Krasny in Chicago)
I understand that Reuters is thinking of revising their style manual to replace "President Bush" and "United States" with the term, "Great Satan."
Have they ordered all of their employees to profess Shahada yet?
U.S. Economy Still on Uphill Trend.
Can't be too positive though, gotta get Bush out in '04.
-PJ
Anyone seen the stats on who hired them?
Willie, I know you have been berated for posting articles about 1200, 800, 600, etc layoffs. But I haven't seen anyone post 1200, 800, 600 etc hirings. Where are they?
I'm not. Heck, I didn't buy into the lunatic euphoric hysteria that surrounded the 3rd Qtr GDP report, did I?
Sheesh, that wasn't even a "preliminary" report, it was an "advance" report based on even sketchier data. I said when it came out that it'll probably be revised downward. Between this Reuters report and the one that was just released on the Trade Deficit, it looks like my assertions are coming true.
You have to be able to read Chinese.
Have you checked the size of your heart lately-- I suspect it may be two sizes too small. You're a mean one, Mr. Green.
I was harboring the same thoughts.
I remember thinking before I celebrate, I'll wait until I hear the "revised" figures, along with the usual excuses for why the first figures were lies--I mean, were honest mistakes.
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