The Empire State Manufacturing Survey indicates that conditions for New York manufacturers improved for the sixth consecutive month in January. The general business conditions index climbed 11 points, to 15.9. The new orders and shipments indexes posted similar increases, and the unfilled orders index rose above zero. Both the prices paid index and the prices received index rose significantly, with the latter moving above zero for the first time in more than a year. Employment indexes advanced into positive territory. Future indexes were highly optimistic; activity and employment were widely expected to improve over the next six months. Prices, however, were expected to continue to climb in the months ahead.
Here is a chart from the report:
Over the last two months the number dropped to near 0, leading to some concern. But the numbers have rebounded indicating this region is doing well. Also note that this is the 6th straight month of positive readings; this is not a one time event but a clear trend.
From the BLS:
On a seasonally adjusted basis, the December Consumer Price Index for All Urban Consumers (CPI-U) rose 0.1 percent, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the index increased 2.7 percent before seasonal adjustment.
There is plenty of good news in this report. First, inflation is moderate but not crushing. A little inflation is a good thing because it indicates either demand pull or cost push inflation (or most likely a combination thereof) exists. But neither demand not cost is strong enough to lead to runaway inflation. Secondly, this report indicates that the deflationary scare from 2008 is more or less over at this point. To that end, consider these charts:
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The month to month CPI numbers have shown continued increase since August and are up 7 of the last 8 months.
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While the YOY number is 2.7%, remember the comparison is to a very low December 2008 level. That means the YOY numbers for the next two months will be high.
Overall, both of these numbers were very good.
