Poor economic data starts the month

Most forecasting of macroeconomics is not clear-cut. There usually is no consensus with all numbers so you have to weight information and look at the trends. Today non-farm payroll has gone negative for the first time since 2002. The trend has been down for 2 year but going negative is a clear sign of the poor economy even if unemployment rate fell to 4.9 percent. The change in manufacturing payrolls were down 28,000. This was supposed to be the one bright spot in the economy. Yet, the ISM manufacturing index turned up above 50 which is a good sign. We will likely still see exports increase. Average hourly earnings are down and the work week is also down. This Friday information was on top off the mixed numbers earlier in the week.

Home sales were below expectations on Monday, down about 4.7%. The Case Shiller index was down 7.7 percent yoy. Mortgage applications were also lower than the previous week after an end of the year boost. Construction was down 1%. Hosing is not responding to the lower interest rates. There is no relief in the housing area. Durable goods orders were actually up big which was a surprise, but consumer confidence is continuing to slide. GDP is coming in at below 1% based on fourth quarter numbers and consumption is moving at about 2%. The core PCE price index is still high at 2.7%

Overall, we have seeing a slow economy with relatively high prices -the stagflation-lite scenario.