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Better Than Expected, But Still Not Strong

December 5, 2012 – 6:07 pm

This week has been and will be full of economic statistics that help us gauge the direction of the economy. The numbers will be a little cloudy because of Hurricane Sandy. The hurricane shut down most of the Northeast for a couple of weeks.

What is surprising is that most of the numbers thus far are stronger month over month not weaker. The ISM manufacturing number is the exception being down to 49.5 for November from 51.7 the previous two months. However, the more important ISM non-manufacturing number, more important because we are more a service economy than a manufacturing one, came in at a rise to 54.7 from 54.2 a month ago and higher than the projected number of 53.

Construction spending was up much more than expected though in fact the overall numbers in construction are low. Housing is still on the mend, slow though it may be.

A surprise was reported in factory orders being up .8% when it was expected to be down .1% from Sandy.

Finally the ADP employment number came in at 118,000 new jobs which was expected and down from 157,000 the month before. Again, the reduction blamed on Sandy.

We are going to have to wait another month or two to give us some sense of direction. The economy appears to be limping along with little reason to change its slow growth pattern. We have more numbers coming in over the next couple of days but they will not change the outlook.

A real change will come from Washington i.e. the Fiscal Cliff. That might give the economy the boost it needs, but again, it depends on what the politicians come up with.

Good Trading
Steve Peasley

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