January looked a bit better through the prism of the ISM manufacturing index, which rose again last month to 54.1 from December’s 53.1. That’s the third monthly increase in a row. Readings above 50 are generally interpreted as a sign that the economy is growing. It’s hardly a knock-out blow against analysts warning of high recession risk these days, but it’s clearly a step in the right direction. At this critical juncture for the global economy, anything that doesn’t bite us is a big help.
Daily Archives: February 1, 2012
Major Asset Classes | Jan 31, 2012 | Performance Update
Last month was kind to risky assets. Indeed, there was no red ink in January for our broadly defined benchmarks of stocks, bonds, REITs and commodities. Ironically, cash (3-month T-bills) retreated ever so slightly on a monthly basis. Otherwise, the overall performance in this year’s first month was the best since last October, with the Global Market Index (a passive, market-value weighted mix of all the major asset classes) rising a robust 4.0% last month.
ADP: Job Growth Slows In January
Job growth slowed in January, according to ADP. It wasn’t a cataclysmic slowdown, but it’s enough to keep the debate about recession risk bubbling. U.S. nonfarm private sector employment increased by a seasonally adjusted 170,000 last month, according to the ADP Employment Report. That’s down from the 292,000 gain in December. It’s clear that the labor market is still expanding, and that’s one more favorable trend for the optimists. But the magnitude of the downshift is hardly a clear signal of hope about the future. At the very least, the outlook for the business cycle is a bit more hazy in the wake of this report.