Most of the data released in the past week regarding the U.S. economy were encouraging.
We negatively note that the industrial production declined in January by 0.1% (versus expectations for +0.2%), however December and November data were revised upward.
The Empire State manufacturing expectations survey of the New York area rose unexpectedly to its highest level in 9 months (+10.0 versus -7.8 in January).
We emphasize that the positive indication from this survey is compatible to the increase recorded in the last two months in the manufacturing purchasing managers’ indices in the U.S. (ISM Manufacturing and “Markit” PMI), an evidence for the expected improvement of the American manufacturing sector in the coming months.
In reference to the American consumer, we positively note the rise in the University of Michigan consumer confidence index for February (which rose to its highest level in the last three months), the decline in the initial jobless claims, and the increase in U.S’s retail sales in January.
A slowdown was recorded in the volume of private consumption:
Retail sales rose in January by 0.1%, following an average monthly rise of 0.5% in November and December.
Nevertheless, the figures are still encouraging, especially when taking into account the concern that the taxes increases (in the beginning of the year) significantly affect the volume of private consumption.
On the negative side, we shall note that an internal email of a senior in Walmart from February 12th leaked to a Bloomberg journalist last Friday.
That email revealed that the net sales recorded in early February this year were the lowest in the last seven years, probably as a result of increasing the U.S. Payroll tax.
The U.S. earnings season is coming to an end (about 79% of the companies included in the S&P 500 index have already reported their results), and the summary so far points to a recovery in the U.S. business sector.
Nevertheless, we note that the volume of growth in revenues (year-over-year) remained relatively moderate compared to the level recorded in late 2011 and in the first quarter of 2012.