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Earlier this week, I updated
the January profile for CS-ETI and CS-ETI and the overall trend
continued to show a bias for growth. But the analysis was based on an
incomplete data set. With three more data points to consider, the data
set is missing fewer pieces and so the January profile looks a bit more
Here's a brief tour of the latest data updates:
Real retail sales decelerated last month, rising just 0.1% over
December. The year-over-year rate, however, reflected a more encouraging
2.8% gain. That's about average for the annual rate posted in each
month over the past year.
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Meanwhile, the year-over-year change in the real monetary base (M0)
accelerated in January, advancing 2.2% vs. a 0.3% annual gain through
December. In fact, last month's increase in M0 vs. the year-earlier
level is the highest annual rate of growth since last April.
Newly issued building permits continued to trend higher in January,
rising 1.8% over December. On a year-over-year basis, permits increased
35% through this year's first month, or near the fastest pace since the
The remaining unknowns for the January inputs for CS-ETI and CS-EMI
are real personal income and spending, and real manufacturing and trade
sales. Considering the preponderance of growth for the numbers published
so far, however, it's getting easier to assume that the January read on
the economy will remain positive once the final updates are in.
February and beyond, of course, are a mystery. Questions about the
impact from the automatic federal budget cuts scheduled to begin next
month threaten to slow economic growth. Considering the modest rate of
expansion, some analysts say the odds will increase that the business
cycle will slip over to the dark side if Congress doesn't intervene to
soften the blow from the forced spending reductions. If the relatively
upbeat January profile gives way in the months ahead, we'll see the
deterioration in the data. Stay tuned….