{"id":1439,"date":"2019-01-15T13:25:18","date_gmt":"2019-01-15T18:25:18","guid":{"rendered":"http:\/\/naroffeconomics.com\/?p=1439"},"modified":"2019-01-15T13:25:20","modified_gmt":"2019-01-15T18:25:20","slug":"december-wholesale-prices-and-january-empire-state-manufacturing-index","status":"publish","type":"post","link":"https:\/\/naroffeconomics.com\/?p=1439","title":{"rendered":"December Wholesale Prices and January Empire State Manufacturing Index"},"content":{"rendered":"\n


<\/strong><\/p>\n\n\n\n

KEY DATA:<\/strong> PPI: -0.2%; Goods: -0.4%;\nServices: -0.1%\/ Empire State: -7.6 points; Orders: -9.9 points; Jobs: -10.1\npoints<\/p>\n\n\n\n

IN A\nNUTSHELL:<\/strong>  \u00e2\u20ac\u0153Businesses are becoming more cautious about\nthe future as the shutdown and trade battles start to bite.\u00e2\u20ac\u009d<\/em><\/strong><\/p>\n\n\n\n

WHAT IT\nMEANS:<\/strong> While\nthe economy slowly burns and Washington fiddles, the negative economic data are\nstarting to mount.  <\/em><\/strong>One part of\nthe government that is open is the Bureau of Labor Statistics and the data\ncontinue to be released, at least most of it. \nDecember\u00e2\u20ac\u2122s Producer Price Index pointed to a slowing in cost pressures\nat the wholesale level.  Clearly, the\nsharp drop in energy-related products (-5.4%) was the driving factor.<\/em><\/strong>  On the other hand, food prices soared<\/em><\/strong>, which\nthey have been doing for a while. Still, excluding the volatile components, goods prices\nwere largely flat.  As for services,\nwhere much of the inflation had been coming, costs declined.  <\/em><\/strong>Construction costs, which also had\nbeen on the rise, posted only a modest gain. \nMost components of the report were either flat or down, indicating\nthere is limited price pressure at the finished goods or services level.  <\/em><\/strong>As for the pipeline, except for\nfoods, there appears to be no reason to think that there will be accelerating business\ncosts in the next few months.<\/p>\n\n\n\n

The manufacturing has been expanding and hiring like\ncrazy, but that may be coming to an end. \nThe New York Federal Reserve Bank\u00e2\u20ac\u2122s Empire State Manufacturing Survey\ntanked in early January.  <\/em><\/strong>Just about every component\nmeasuring current conditions posted large declines.  Not surprisingly, the outlook for the future\nfell sharply as well.<\/em><\/strong> \nExpectations on new orders are now barely positive and hit the lowest\nlevel in nearly two years.  New\nYork may not be the center of the world when it comes to manufacturing, but the\nlevel of decline is a warning.<\/em><\/strong> <\/p>\n\n\n\n

MARKETS AND\nFED POLICY IMPLICATIONS:<\/strong>   <\/p>\n\n\n\n

We now have the longest government shutdown on\nrecord.<\/em><\/strong>  Yes, it is a \u00e2\u20ac\u0153partial\u00e2\u20ac\u009d closure, but that\ndoesn\u00e2\u20ac\u2122t make much of a difference to the workers who are not being paid and\nbusinesses that cannot get things done because agencies are closed.  How much the shutdown will take out of\ngrowth is uncertain as it depends upon when the government reopens.<\/em><\/strong>  The sooner sanity returns to Washington,\nokay, forget that.  The sooner there is a bill that\nallows for the government to fully reopen and stay open and pays the workers\nand allows businesses who cannot get their subsidies, licenses, permits or\nwhatever to get back to normal, the smaller the ultimate impact.<\/em><\/strong>  But if it lasts an entire quarter, look for a\nGDP number that is probably in the 1% to 1.5% range, or even lower.  Indeed, you cannot rule out a negative\nnumber.<\/em><\/strong>  Speaking of GDP, the\nfirst reading of fourth quarter growth is scheduled to be released on January\n30th<\/sup>.  The Bureau of Economic\nAnalysis, which produces the report, is not open.  Given the stands taken by the major actors in\nthis Shakespearean tragedy seem to be rock solid, there is a real likelihood\nthe report will be delayed.  In addition,\nsome of the numbers in the monthly employment report, most notably the\nunemployment rate, may not be available since they require data produced by the\nCensus Bureau, which is closed.  Is\neveryone enjoying the chaos?  <\/p>\n","protected":false},"excerpt":{"rendered":"

KEY DATA: PPI: -0.2%; Goods: -0.4%; Services: -0.1%\/ Empire State: -7.6 points; Orders: -9.9 points; Jobs: -10.1 points IN A NUTSHELL:  \u00e2\u20ac\u0153Businesses are becoming more cautious about the future as the shutdown and trade battles start to bite.\u00e2\u20ac\u009d WHAT IT MEANS: While the economy slowly burns and Washington fiddles, the negative economic data are starting … Continue reading December Wholesale Prices and January Empire State Manufacturing Index<\/span> →<\/span><\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-1439","post","type-post","status-publish","format-standard","hentry","category-economic-indicators"],"_links":{"self":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/1439","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1439"}],"version-history":[{"count":1,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/1439\/revisions"}],"predecessor-version":[{"id":1440,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/1439\/revisions\/1440"}],"wp:attachment":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1439"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1439"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1439"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}