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Urban Carmel: February Macro Update: Outside Manufacturing, Growth Remain Positive, But Slow

* Friday, February 5, 2016

Summary: The balance of the macro data from the past month continues to point to positive but sluggish growth. On balance, the evidence suggests the imminent onset of a recession is unlikely.

The main positives are in employment, consumption growth and housing:

• Employment growth is close to the best since the 1990s, with an average monthly gain of 222,000 during the past year. Full-time employment is soaring.
• Recent compensation growth is the highest in more than 6 years: 2.5% yoy in January.
• Most measures of demand show 3-4% nominal growth. Personal consumption growth in 2015 was the highest in 9 years.
• New housing sales, starts and permits remain near an 8 year high.
• The core inflation rate ticked up above 2% and to the highest rate since July 2012

The main negatives are concentrated in the manufacturing sector (which accounts for just 10% of GDP):

• Core durable goods growth fell 4% yoy in December. It was weak during the winter and there has been little rebound since.
• Industrial production has also been weak, falling -1.3% yoy.

Prior macro posts from the past year are here.

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http://fat-pitch.blogspot.com/2016/02/february-macro-update-outside.html

• George.

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