by Calculated Risk on 11/01/2012 10:00:00 AM

The ISM manufacturing index indicated expansion in October. PMI was at 51.7% in October, up from 51.5% in September. The employment index was at 52.1%, down from 54.7%, and the new orders index was at 54.2%, up from 52.3%.

From the Institute for Supply Management: October 2012 Manufacturing ISM Report On Business®

Economic activity in the manufacturing sector expanded in October for the second consecutive month following three months of slight contraction, and the overall economy grew for the 41st consecutive month, say the nation's supply executives in the latest Manufacturing ISM Report On Business®.

The report was issued today by Bradley J. Holcomb, CPSM, CPSD, chair of the Institute for Supply Management™ Manufacturing Business Survey Committee. "The PMI™ registered 51.7 percent, an increase of 0.2 percentage point from September's reading of 51.5 percent, indicating growth in manufacturing at a slightly faster rate. The New Orders Index registered 54.2 percent, an increase of 1.9 percentage points from September, indicating growth in new orders for the second consecutive month. The Production Index registered 52.4 percent, an increase of 2.9 percentage points, indicating growth in production following two months of contraction. The Employment Index registered 52.1 percent, a decrease of 2.6 percentage points, and the Prices Index registered 55 percent, reflecting a decrease of 3 percentage points. Comments from the panel this month reflect continued concern over a fragile global economy and soft orders across several manufacturing sectors."

Click on graph for larger image.

Here is a long term graph of the ISM manufacturing index.

This was slightly above expectations of 51.0% and suggests manufacturing expanded in October.

by Calculated Risk on 11/01/2012 08:30:00 AM

The DOL reports:

In the week ending October 27, the advance figure for seasonally adjusted initial claims was 363,000, a decrease of 9,000 from the previous week's revised figure of 372,000. The 4-week moving average was 367,250, a decrease of 1,500 from the previous week's revised average of 368,750.

The previous week was revised up from 369,000.

The following graph shows the 4-week moving average of weekly claims since January 2000.



Click on graph for larger image.


The dashed line on the graph is the current 4-week average. The four-week average of weekly unemployment claims decreased to 367,250. This is about 4,000 above the cycle low for the 4-week average of 363,000 in March.

Weekly claims were slihgtly lower than the consensus forecast of 365,000.



And here is a long term graph of weekly claims:

Mostly moving sideways this year, but near the cycle bottom.

SPECIAL NOTE: Due to Hurricane Sandy, we will probably see an increase in initial unemployment claims over the next few weeks.

All current Employment Graphs

by Calculated Risk on 11/01/2012 08:23:00 AM

ADP reported that employment in the U.S. nonfarm private business sector increased by 158,000 from September to October, on a seasonally adjusted basis.

This was above the consensus forecast for private sector jobs added, and is a little surprising given the change in methodology.  Note:  The BLS reports on Friday, and the consensus is for an increase of 125,000 payroll jobs in October, on a seasonally adjusted (SA) basis.

ADP hasn't been very useful in predicting the BLS report (maybe the new method will work better), but this suggests a stronger than consensus report.

by Calculated Risk on 10/31/2012 09:10:00 PM

Here are the winners for the October economic question contest:

1st: Don Durito

2nd tie: Pat MacAuley, Vijay Kumar, Christopher Brandow, Daniel Brawdy and 2 OpenID Users.

Congratulations all!

Thursday:
• At 8:15 AM: ADP will release their Employment Report for October. This report is for private payrolls only (no government). The consensus is for 155,000 payroll jobs added in October. However this is the first report using a new methodology, and the consensus probably doesn't reflect that change. I expect something significantly lower than the "consensus". This doesn't mean the labor market is weaker than originally thought - just that the ADP methodology has been changed.

• At 8:30 AM, the initial weekly unemployment claims report will be released. The consensus is for claims to decrease to 365 thousand from 369 thousand.  Note: There will probably some increase in weekly unemployment claims over the next few weeks related to Hurricane Sandy.

• Also at 8:30 AM, Productivity and Costs for Q3. The consensus is for a 1.3% increase in unit labor costs.

• At 10:00 AM, the ISM Manufacturing Index for October will be released. The consensus is for a decrease to 51.0, down from 51.5 in September. (above 50 is expansion).

• Also at 10:00 AM, the Census Bureau will released the Construction Spending report for September. The consensus is for a 0.7% increase in construction spending.

• All day: Light vehicle sales for October. The consensus is for light vehicle sales to increase to 15.0 million SAAR in October (Seasonally Adjusted Annual Rate).

Here are the first four questions for the November economic prediction contest (Note: You can now use Facebook, Twitter, or OpenID to log in).

by Calculated Risk on 10/31/2012 06:27:00 PM

From the National Restaurant Association: Restaurant Performance Index Declined in September Due to Softer Sales, Traffic

The RPI – a monthly composite index that tracks the health of and outlook for the U.S. restaurant industry – stood at 100.4 in September, down 0.3 percent from August. Despite the decline, September represented the 11th consecutive month that the RPI stood above 100, which signifies continued expansion in the index of key industry indicators.

“Although restaurant operators reported softer same-store sales and customer traffic levels in September, they are somewhat more bullish about sales growth in the months ahead,” said Hudson Riehle, senior vice president of the Research and Knowledge Group for the Association. “Forty-five percent of restaurant operators expect their sales to improve in the next six months, while only 11 percent expect weaker sales.”

The Current Situation Index, which measures current trends in four industry indicators (same-store sales, traffic, labor and capital expenditures), stood at 99.9 in September – down 0.7 percent from a level of 100.6 in August. Although same-store sales remained positive in September, the softness in the labor and customer traffic indicators outweighed the performance, which led to a Current Situation Index reading below 100 for the second time in the last three months.

Click on graph for larger image.

The index declined to 100.4 in September, down 0.3% from August (above 100 indicates expansion).

Restaurant spending is discretionary, so even though this is "D-list" data, I like to check it every month.