The weekly leading indicators have stabilized but remain
in firm downtrends. The monthly leading indicator through
12/07 dropped sharply again. The monthly re-caps the weeklies
but also includes a large downward hit for the breadth of
new orders in the manufacturing sector.
The monthly jobs report was plug ugly. The broad household
survey showed a sizable decline in jobs and a sharp uptick in
the unemployment rate to 5.0%. Measured yr/yr, jobs growth was
a scant 0.2%. This coupled with a 4.1% yr/yr gain in the average
wage gives underlying support for current dollar growth of
4.3% for the economy. Adjusted for inflation, it zeros out.
Inflation is canceling out the very modest growth potential.
Talk of a 50 bp cut in Fed Funds and a possible stimulus
package from GWB and his group will do little to help the
economy if inflation pressure continues to intensify.
Unfortunately, my inflation thrust indicator remains in a
sharp uptrend.
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