Two More Things I Like Thus Far
Due
to the uncertainty surrounding the war in Iraq and the bearish
sentiment that ensued last month, the financial markets have been discounting
March economic data releases and are now waiting April’s numbers instead. However,
some recent data, such as the Beige Book and the Cass Freight Index, indicates
that the market may not need to wait for April’s data for confirmation of a
pickup in economic activity, as certain sectors may already be improving…
Today, the Federal Reserve released its Beige
Book report–which is a collection of anecdotal information on last month’s
economic conditions in the Fed’s twelve districts. And as expected, the report
suggests that the pace of overall economic activity continued to be lackluster.
However, a more thorough review of the release indicates that certain areas of
the economy, such as business spending, may have started to pick up last
month–amid the war in Iraq.
The report mentions that more than half of
the districts noted pockets of improvement in manufacturing. More specifically,
these improvements came from companies producing hardware, semiconductors, and
machine tools–all business related goods. The report also showed signs that the
labor market may firming up in certain areas of the country. Both Cleveland and
Kansas City reported fewer plans for staff reductions, while New York, Atlanta,
and Dallas reported stronger demand for temporary workers.
Recent data from the transportation sector also
suggests that economic activity in certain areas of the economy may have already
begun to improve. The Cass Freight Index, which measures freight shipments from
1500 companies across the country, showed a 9.18% increase from February–the
largest gain in over two years. Usually, increased activity in the
transportation sector indicates a pickup in economic growth.