Accentuate the Positive

The Lehmann Letter ©

Today’s employment report from the BLS disappointed many: http://stats.bls.gov/news.release/empsit.nr0.htm

December employment fell by 85,000 jobs and the unemployment rate remained at 10.0%.

But manufacturing overtime held steady at 3.4 hours/week, a big improvement over the third quarter’s 3.0 hours/week. That’s a signal that manufacturing is recovering.

Today’s Census Bureau report on wholesale sales and inventories confirmed the upward trend: http://www2.census.gov/wholesale/pdf/mwts/currentwhl.pdf

Sales fell throughout the first half of the year, began to strengthen in the third quarter and then made a big gain in November. In response business also began rebuilding inventories in November. That’s significant because businesses had depleted their stocks of goods throughout the year, even in the third quarter when sales had begun to recover. Now business has regained sufficient confidence in sales-improvement to rebuild inventories. That’s a good sign.

More overtime, improved sales and inventory buildup. They should lead to employment gains before long.

© 2010 Michael B. Lehmann