Global Business Confidence:++

Global business confidence is at its highest level since early 2006 at the height of the last economic expansion. Sentiment has strengthened across the globe and all industries since the beginning of the year. Particularly encouraging is a jump in hiring intentions, which are now consistent with monthly job gains of near 200,000 in the U.S. Sales and investment are also notably strong. Pricing, which was under pressure at the end of last year, has strengthened with rising oil and commodity prices. The global economy appears to be operating above its potential

 

Challenger Report: +32%
The number of announced job cuts increased in February to 50,702, the highest since March 2010 and up 32% from January. The February number is still in line with the prerecession rate. Government and nonprofit employment accounted for the largest share of cuts with 16,380 workers affected. Not all of these were in state and local government agencies; the U.S. Postal Service announced cuts affecting 5,600 also.

Agricultural Prices: +2.4%
The all-farm products price index increased 2.4% in February following a sharp increase in January, fueled by higher prices for crops. Crop prices jumped 6.5%, whereas livestock prices advanced 2.9%. Higher prices were received for corn, wheat and milk while strawberries, cattle, broilers and broccoli fetched lower prices. With the advance in prices received this month, the farm products price index is up 24% from one year ago. The food commodities index advanced 3.2% in February and is 229% higher than a year ago. Producers paid 1.5% more for inputs into farm production and 9.4% more than a year ago. Taxes, farm wages and feed grains were among the components that added to the cost of production in February.

Personal Income: -.01%
Consumer spending grew in January, although the pace of growth moderated significantly, to 0.2%, as real spending actually dipped 0.1%. Spending was supported by a government-generated surge in income. Personal income growth rose to 1%. Wage growth remained modest, and the return on assets was strong. The saving rate increased to 5.8%. The top-line PCE deflator rose 0.3% for the second month. Core price inflation accelerated modestly, with prices up 0.1% after being essentially unchanged for the four of the six prior months. Low inflation is supporting consumer budgets.

 

Chain Store Sales: 4.2%
Chain store sales remained strong in February. Growth slowed to 4.2% in February from 4.7% in January, according to the ICSC, with difficult comparisons accounting for some of the weakness. Sales were reportedly boosted by more favorable weather, especially later in the month. The outlook is clouded by rising gasoline prices and an Easter shift, which will move sales from March to April this year.

Jobless Claims: 368,000
Initial claims decreased by 20,000 to 368,000 for the week ending February 26; the prior week's data were revised from 391,000 to 388,000. This was a surprising move, as claims are now moving down faster than would have been expected, a positive sign for labor market conditions. Layoffs are slowing, though the strain from past weakness remains evident. Continuing claims declined by 59,000 to 3.774 million for the week ending February 19-still on the high end of historical trends-and this does not count the millions more on extended and emergency benefits.

Monster Employment Index: 129
The U.S. Monster employment index picked up 7 points between January and February, nearly reversing January's decline. However, at a level of 129, the index suggests that the nation's overall level of recruitment remains little higher than its average for 2010. On a year-ago basis, the index is up just 4%, its weakest increase since last February.

ISM Nonmanufacturing Index: 59.7
The ISM nonmanufacturing index continued to strengthen in February, suggesting that growth is accelerating early in 2011. The composite index rose by 0.3 of a point to 59.7, reaching its highest level since August 2005. Most of the index's components were at similarly high levels and are indicative of a recovery that has broadened, with both households and businesses spending more aggressively.

Productivity and Costs: 2.6%
Nonfarm business productivity in the fourth quarter of 2010 was unrevised from the preliminary reading, with an annualized increase of 2.6% (SAAR); this matched the consensus. There were downward revisions to both output and hours worked. There was a small upward revision to hourly compensation. The decline in unit labor costs over the fourth quarter was unrevised at 0.6%. Productivity growth remains strong but will slow in the near term. With unit labor costs falling, firms will increase their demand for labor, and job growth will accelerate through this year.

Natural Gas Storage Report: -85 bcf
Working gas in underground storage fell by 85 billion cubic feet during the week ending February 25, exactly matching analysts' expectation. This report should boost natural gas prices, since market participants were looking for an even larger decline.

ISM Manufacturing Index: 61.4
Manufacturing is red hot, and there is little sign of it cooling, as the ISM manufacturing index rose from January's 60.8 to 61.4 in February. This marks the sixth consecutive increase and puts the index comfortably above its fourth quarter average of 57.9. The ISM index suggests that the improvement in factory conditions is broadening, which points toward sturdy gains in manufacturing output this quarter. The details remain very strong and favorable for future production; new orders rose to 68 from January's 67.8. Meanwhile, inventories fell below their expansionary threshold of 50 for the first time since June. The employment index increased in February while prices paid inched slightly higher.

 

Construction Spending (C30): -0.7%
Construction spending declined again in January, but the decrease was a modest 0.7%, compared with an upwardly revised December figure. Residential construction is showing some strength, with a gain of 5%. Nonresidential construction spending, however, declined 3%, with private projects scaling back the most. Compared with one year ago, construction spending is down 5.9%.

Pending Home Sales: -2.8%
Pending home sales fell 2.8% to 88.9 in January, while the December figure was revised downward, a reflection of recent softening in homebuying. The decline is broad-based, with a slowdown occurring in all regional markets with the exception of the South. Moreover, pending home sales are lower than year-ago levels across all regions. However, improvement in the labor market in the coming months will fuel the benefits of high housing affordability, pushing the pace of home sales upward.

 

MBA Mortgage Applications Survey:-6.5%
Mortgage applications have failed to gather any upward momentum over the past few weeks. The market, refinance, and purchase indices all declined in the week ending February 25. The market index fell 6.5%, reversing some of the previous week's 13.2% gain. Meanwhile, purchase and refinance applications declined by 6.1% and 6.5%, respectively. The contract rate for 30-year fixed mortgages fell 16 basis points to 4.84%. This brings the cumulative decline over the past two weeks to 28 basis points-a potential positive for home sales.

Chain Store Sales Snapshot: -0.5%
Chain store sales slipped in the latest week, although not as much as soaring gasoline prices might have suggested. Sales fell 0.5%, reversing only a small portion of the prior week's 2.6% gain. The decline continues a seasonally typical period of erratic movements. Year-over-year growth improved to 3.3%, the strongest gain in seven weeks.

Vehicle Sales - AutoData: 13.4 mil, SAAR
Vehicle sales were considerably stronger than expected in February, despite escalating gasoline prices. On a seasonally adjusted annualized basis, sales increased to 13.4 million units. Sales have been rising steadily over the past year and reflect a slowly improving economy, somewhat better access to credit, and the release of pent-up demand.

Oil and Gas Inventories: -364 mil barrels
Crude oil inventories fell by 364,000 barrels during the week ending February 25, short of expectations of a 750,000-barrel increase. Distillate inventories fell by 751,000 barrels, short of expectations of a 1.5-million barrel drop, while gasoline inventories fell by 3.6 million barrels, well below expectations of a 350,000-barrel decline. Inventories rose by 1.2 million barrels in Cushing OK. Refinery capacity utilization rose by more than expected from 79.4% to 80.9%. Petroleum demand declined substantially. This mixed report should weigh on oil prices.

  

Source: Economy.com