Friday, December 31, 2010

USA & Global Economy: Encouraging News in December (GDP Charts) *Monthly Economic Review*


USA & Global Economy: Manufacturing and Services Sectors Continue Expanding after Summer Slump

USA & Global Economy: Encouraging News in December
* Monthly Economic Review *

Although the EU Sovereign Debt Crisis continues, both the USA and Global Economy showed renewed economic recovery after the Summer Slump. Of course, all is not well: the USA financial system continues with problems and weaknesses, including a foreclosure fiasco and crisis, the USA unemployment rate remains high, the USA real estate is in a market depression, the USA cannot stop deficit spending, the USA has an ever increasing national debt, and the Federal Reserve continues quantitative easing aka monetizing and devaluing the U.S. Dollar. There does appear to be a Day of Reckoning for the USA on the horizon, although no one really knows when. The aftermath of the Credit Bubble and Great Recession will linger for a long time. However, the USA GDP is growing faster than projected and the risk of a double dip recession now appears much diminished.

Below are December post headlines from Boom Doom Economy,  Financial Controls, and Baidu Planet summarizing select economic data and news, in reverse chronological order. This is not a comprehensive list of key economic data. It is selected economic data that gives a general idea of the overall economic conditions, with the exceptions noted in the preceding paragraph. Further below is the historical and projected USA GDP per the U.S. Bureau of Economic Analysis. Also further below is the projected GDPs for the USA, Japan, the Euro Area, and Total OECD per the latest OECD economic outlook. The economic data for December will now begin and should indicate continuing economic recovery and expansion. Q4 2010 should be a better than initially projected quarter for the USA and Global Economy. Whether the pace of the economic recovery will continue on to Q1 2011 or will slow is the concern now.

USA Positive Economic Data and News
USA Weekly Leading Index at 33-Week High! (Charts) *Annualized growth rate continues positive!*
USA Weekly Unemployment Claims Drop Below 400,000! (Charts) *Lowest in 29 months, since July 2008*
USA Industrial Production at 27-Month High! (Charts) *Capacity utilization increases*
USA November Retail & Food Sales at 36-Month High! (Chart) *Near November 2007 peak*
USA Consumer Sentiment at 6-Month High (Chart) *2 consecutive strong monthly increases*
USA Total Consumer Credit Increases in October (Charts) *Revolving credit down 26th consecutive month*
USA Non-Manufacturing Index (NMI) Up +0.7% in November (Chart) "Sector continued expanding for 11th consecutive month"
USA Manufacturing PMI Dips -0.3% in November (Chart) "Sector continued expanding for 16th consecutive month"
Fed Beige Book: "USA Economy Continued to Improve" (Review) "Hiring activity showed some improvement"

USA Neutral and/or Negative Economic Data and News
Bank Failure Friday: No FDIC Closings on New Year's Eve! (Charts) *2010 final total 157, highest since 1992*
USA Monthly Consumer Confidence Index Dips in December (Chart) *Modest decline, consumers remain tepid*
USA GDP Q3 2010 Estimated at +2.6% (Charts) *Increase of +0.1% from prior estimate*
Federal Reserve: USA Economic Recovery Rate Insufficient (GDP Chart) *Not decreasing unemployment*
USA Unemployment Rate Increases to 9.8% in November (Charts) "Employment was little changed (+39,000)"

Global Positive Economic Data and News
China Manufacturing Expands at Slower Rate in December (Chart) "Conditions continue to improve"
Global All-Industry Output Index Down -0.2% in November (Chart) "Economic recovery continued"
Global Services PMI at 5-Month High (Chart) "Sector recovery extended into 16th successive month"
Global Manufacturing PMI at 4-Month High (Chart) "Severe slowdown has reached a bottom"
China Manufacturing PMI at 7-Month High (Video) "Strongest rise in overall new orders since March"

Global Neutral and/or Negative Economic Data and News
OECD: Euro Area Economic Survey (GDP Charts) "Recovery is now underway but will be muted"

USA GDP by Quarter

USA GDP by Quarter (Chart) The chart below is the annualized percentage change of the GDP (seasonally adjusted at annual rate) from the preceding quarter, QoQ, the most common GDP measure. As can be seen, there was a negative dip into the Great Recession beginning 2008 Q1, a rebound peaking with the 2009 Q4, a downward trend in 2010 Q1 and Q2. The USA economy appeared to be at a crossroads in Q2: a continuing downwards trend towards zero growth or a bounce upwards from there? The Q3 +2.6% is a positive bounce upwards. The chart covers the last 23 quarters (5+ years) of USA GDP as reported by BEA from 2005 Q1 through 2010 Q3.

The moving 4-quarter average (1 year) is now +3.25%, which is just above a break-even economy on jobs, creating a small net increase in jobs - but is not robust. The 23-quarter average is +1.23% per quarter, which is a stalled economy, a flat economy, that is not producing jobs and has an increasing unemployment rate. However, the current Q3 GDP +2.6% is well above this average.

OECD: GDP Growth Projections by Quarter

OECD: GDP Growth Projections by Quarter (Chart) Below is the OECD GDP Growth Projections by Quarter for the USA, Japan, the Euro Area, and the entire OECD. These are annualized percentage growth rates. The chart is for 10 quarters, from Q3 2010 through Q4 2011. The USA lowest quarter is +1.9% in Q4 2010 (now) and the highest is +3.7% in Q4 2012 (2 years from now). The Japan lowest quarter is +0.6% in Q2 2011 and the highest is +2.7% in Q1 2011 (next quarter). The Euro Area lowest quarter is +1.3% in both Q4 2010 (now) and Q1 2012 (next quarter). The highest quarter is +2.2% in both Q3 2012 and Q4 2012 (2 years from now). The Total OECD lowest quarter is +1.7% in Q4 2010 (now) and the highest is +3.2% in Q4 2012 (2 years from now). No negative GDP quarters are projected nor on the graph.


USA & global economic news & analysis. There is always good/bad economic news, no matter how good/bad times are.

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