{"id":1663,"date":"2020-02-20T13:20:33","date_gmt":"2020-02-20T18:20:33","guid":{"rendered":"https:\/\/naroffeconomics.com\/?p=1663"},"modified":"2020-02-20T13:20:33","modified_gmt":"2020-02-20T18:20:33","slug":"january-leading-indicators-february-philadelphia-and-new-york-fed-manufacturing-indices-and-weekly-jobless-claims","status":"publish","type":"post","link":"https:\/\/naroffeconomics.com\/?p=1663","title":{"rendered":"January Leading Indicators, February Philadelphia and New York Fed Manufacturing Indices and Weekly Jobless Claims"},"content":{"rendered":"\n

KEY DATA:<\/strong>  LEI: +0.8%\/ Phila. Fed (Manufacturing): +19.7\npoints\/ Empire State Survey: +8.1 points\/ Claims: +4,000<\/p>\n\n\n\n

IN A\nNUTSHELL:<\/strong>  \u201cMore good economic data, but again, they seem\nto be powered by mild weather.\u201d<\/em><\/strong><\/p>\n\n\n\n

WHAT IT\nMEANS:<\/strong>  My decision to buy snow insurance (a snow\nblower that is now collecting dust) is working out quite well.  It looks like we will not have any snow in\nPhiladelphia this month and we have had less than one inch so far this\nseason.  I love it!  My insurance plan is even helping drive what\non the surface looks like a rebound in the economy.  Housing is having a great winter and that,\nat least in part, powered a sharp rise in the Conference Board\u2019s January Leading\nEconomic Indicators index. <\/em><\/strong> The huge\ndecline in jobless claims, which is slowly unwinding, also played a major role and\nmost\nof the components were up<\/em><\/strong>.  The\nLEI had declined in December and was up minimally in November, which is why I\nraise doubts about the sustainability of the increase.  What the seasonal factors giveth, they\nultimately taketh away.<\/em><\/strong><\/p>\n\n\n\n

Still, I will take the strong numbers while we have\nthem, especially given the problems that China, Europe and the developing\nnations are having given the coronavirus. \nIt hasn\u2019t just been housing that has benefitted from the winter.  It looks like the manufacturing sector is\nimproving as well.  Both the New York\nFed\u2019s Empire State Index and the Philadelphia Fed\u2019s Business Outlook Survey\njumped in February.<\/em><\/strong>  Orders\nsoared and backlogs went from shrinking to increasing in both manufacturing\nsurveys.  But while optimism rose in the\nMid-Atlantic region, respondents were slightly less positive about the future\nin New York.  <\/p>\n\n\n\n

The historic low jobless claims numbers are slowly moving back up to what was the \u201cnormal\u201d level we saw during most of last year.<\/em><\/strong>\u00a0 I say \u201cnormal\u201d because they remain incredibly low.\u00a0 \u00a0\u00a0\u00a0\u00a0<\/p>\n\n\n\n

MARKETS AND FED POLICY IMPLICATIONS:It is hard to take the strong economic data as clear indicators of an economic rebound given the confounding factors of warm weather and the coronavirus.<\/em><\/strong>\u00a0 Yes, builders are having a great time, but it is likely they are simply bringing forward some construction that they would normally due during the spring.<\/em><\/strong>\u00a0 If that is the case, and I suspect it is, we could see some pretty ugly data during the March through June period. As for manufacturing, it is hard to know where all this new demand is coming from.<\/em><\/strong>\u00a0 Firms are not likely seeing stronger foreign demand in this epidemic restrained environment.\u00a0 Indeed, we are already seeing signs that the world economy has slowed<\/em><\/strong> and who knows what is the true condition of the world\u2019s second largest economy, China. And there are no major indications that households are suddenly spending a lot more.\u00a0 <\/em><\/strong>Thus, investors may want to operate in a vacuum and hope that the coronavirus goes away quickly, but that is a risky approach.\u00a0 The Fed sees the virus risks as real, but has no idea at this point the extent of the potential damage.\u00a0 For now, I will enjoy being outside when I am usually bundled up in my house and hope that the virus gets brought under control quickly and the \u201csee no evil\u201d investor is right in continuing to pile into the markets.<\/em><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

KEY DATA:  LEI: +0.8%\/ Phila. Fed (Manufacturing): +19.7 points\/ Empire State Survey: +8.1 points\/ Claims: +4,000 IN A NUTSHELL:  \u201cMore good economic data, but again, they seem to be powered by mild weather.\u201d WHAT IT MEANS:  My decision to buy snow insurance (a snow blower that is now collecting dust) is working out quite well.  … Continue reading January Leading Indicators, February Philadelphia and New York Fed Manufacturing Indices and Weekly Jobless Claims<\/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-1663","post","type-post","status-publish","format-standard","hentry","category-economic-indicators"],"_links":{"self":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/1663","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=1663"}],"version-history":[{"count":1,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/1663\/revisions"}],"predecessor-version":[{"id":1664,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/1663\/revisions\/1664"}],"wp:attachment":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1663"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1663"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1663"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}