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Blog Entries from February 2011

New Tax Cuts Boost Personal Income

Submitted on February 28, 2011 - 10:29am
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Today’s release covers personal income and consumer spending for the month of January.  The big news is on the income side where personal income increased 1.0 percent in January -- the largest increase since May 2009 and substantially higher than private expectations of 0.4 percent.  Why did income go up so much?  The bottom line is that income was substantially boosted by the tax cuts the President signed in December.  More specifically, the jump in income in January from December was driven by the reduction in the withholding rate for social security from 6.2 to 4.2 percent.   Wages and salaries, the largest component of income, rose a modest

Manufacturing Expansion, Rising Business Investment Show Demand for Durable Goods Likely to Grow in 2011

Submitted on February 24, 2011 - 10:11am
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The bottom line is that January’s data on durable goods orders and shipments wasn’t as strong as expected, but we should keep in mind two facts.  First off, last year these series did pretty well.  Second, as I'll discuss below, several fundamental factors should boost the demand for durable goods through 2011, so let’s make sure not to place too much emphasis on a single month’s data point.    

Consumer Spending Strength Continues... And a Look at Changing Shopping Habits

Submitted on February 15, 2011 - 10:00am
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The bottom line is that consumer spending gathered steam late last year, and according to today’s Retail Sales data release, consumer spending is on track to post a moderately strong gain in Q1, a trend consistent with other indicators of consumer spending. [1]

Foreign Trade: Year in Review - Big Export Growth in 2010

Submitted on February 11, 2011 - 9:55am
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Today’s release fills out the trade picture for 2010, and what a year it was from the foreign trade perspective: economic growth around the world was mixed (as the IMF recently put it, "Global Recovery Advances but Remains Uneven”), several commodity prices shot up, and some foreign exchange rates swung around (hello euro). 

Attached file: 
application/pdf iconchart_exports_foriegngdp.pdf

January Employment Report: Getting Better, Not Good Enough Yet

Submitted on February 4, 2011 - 11:01am

Today’s jobs report has some good news, but we continue to look for better news, with the bottom line being that the unemployment rate fell again and by a lot but payrolls didn’t increase as much as we would have liked. I’m not trying to wear rose-colored glasses here, but most of the other recent economic indicators have been much more positive than the stubborn payroll numbers would suggest, and economists and commentators have been talking about what the numbers all mean and looking for analogs.