While investors and consumers fretted last week, the business sector got some feet as the US Industrial economy (if pipeline scheduling is correct) turned and advanced mildly, while consumption and the financial markets tumbled.
The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) broke its string of 8 consecutive weekly declines, gaining slightly to 119.3 (vs last weeks 119.0). In its dailies, the measure started soft over last weekend then firmed on Monday..
The Consumption Index rose for its second week in a row, climbing to 146.5 (from last weeks 145.5). In its dailies the measure started the week firm then softened Monday-on.
The Inventories measure (the cumulative weekly difference between the Production Index and the Consumption Index) again continued in its long-term decline.
Pattern-changes last Monday revolved around both the changeover to a new calender-month, and the US governmental budget-compromise.
The much-dreaded US-credit-downgrade occurring on Friday, though talked up in the press and rattling the markets in Sunday-night pre-trade, appeared to cause no significant changes as of yet in preliminary weekend gas-flow scheduling... we will wait to see if that holds up following Monday-night & Tuesday-night actuals on the weekend estimates.
Overall, breaking of the recent pattern of receding industrial activity is a positive, though it is temporarily outweighed by weakness in consumption. Apart from the last 8 weeks, it has been consumption that leads the economy, and consumption peaked in March.
The US economic "ball" appears to remain in the Federal Reserves end of the court. Where are you, QE3?