Tuesday, February 14, 2012

Not yet kicking into that higher gear?

The NFIB survey ticked up in January and it did move up by about the breadth of a tic.

The index has recovered from its swoon that began early last year but now as it gets back near its past cycle peak it is losing momentum.

The chart tells the sad story all too well.

NFIB respondents are seeing evidence of an economic recovery and expect it to continue. That's the Good news. The 'expect the economy to improve' response surged ahead by a net of five points. Still that reading is in the bottom 30% of its high/low range since 1987. It is not an impressive level even though the reading is moving in the right direction.

Retail sales are in this same boat. Sales rose in January but were not impressive. Still, sales rose more strongly in 'the control' format that uses only the data that will be source data for the PCE report and for GDP. That means excluding some big items such as gasoline station sales, vehicle sales and building materials sales. What happens to these categories remains important but the retail sales report is not the source document for them.

Still auto sales were not as strong as expected but non-auto sales did look a lot better. Since autos are still stronger than overall sales on a Yr/Yr basis, maybe we had some issues with seasonal factors or fleet sales in this report. But in context auto sales still look pretty good.

Still... we are no longer seeing more good news piled on top of more good news. and if the economy is going to kick into that higher gear we will need to see some of that.



One bright spot in all of this economic gloom is corporations are profitable thats keeping the downturn from spirling out of control.


Its hard to detect a trend.