It Sure Doesn't Look Like An Economic Recovery

By John S. McClenahen There may be a recovery from the 2001 recession somewhere in the economic works. But the newest round of data sure doesn't show it. The U.S. Labor Department's closely watched Producer Price Index (PPI), a key measure of inflation, rose a stunning 1.6% in January, far more than economists generally expected. The dramatic increase followed two consecutive months of decline. The PPI decreased 0.1% in December 2002 and 0.3% in November. Even the so-called core-PPI, which does not include the often-volatile changes in the prices of food and energy, soared 0.9% in January. After some tentative signs that the U.S. labor market might be stabilizing, initial claims for unemployment insurance are on the rise again. For the week ending Feb. 15, jobless claims rose to 402,000, an increase of 21,000 from the previous week's revised figure of 381,000, Labor Department statistics reveal. Even the four-week moving average for initial claims, which some economists consider to be a better measure of labor market trends, is on the rise. Last week it was at 394,750, up 4,750 from the previous week's revised average of 390,000. Meanwhile, U.S. trade in goods and services with the rest of the world remains in deep deficit. In December 2002, says the U.S. Commerce Department, U.S. imports of $125.4 billion far outpaced U.S. exports of $81.2 billion. The resulting $44.2 billion deficit was $4.2 billion greater than November's figure of $40 billion. For the full year 2002, the U.S. imported $1.4082 trillion worth of goods and services while exporting $973 billion worth, leaving a whopping $435.2 billion deficit. In other reports, the index of leading economic indicators, a harbinger of future economic growth, fell 0.1% in January, the Conference Board said Feb. 20 in an unusual revision of its report. The business research group hours earlier said the index had been flat but later said some revised data had been left out of its initial calculation. The decline in January follows three consecutive monthly gains. In December, the index rose a revised 0.2%, up from the initial estimate of a 0.1% rise. Agence France-Presse contributed the Conference Board data.

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