With this week’s data we can continue the theme of better over here and worse over there, meaning U.S. economic conditions continue to improve while international conditions remain stressed. In the February employment numbers we see strengthening U.S. labor markets, but in the January trade numbers we see the negative consequences of higher imported oil prices which will drag on current quarter GDP growth. Payroll jobs increased by 227,000 in February. The unemployment rate for February stayed at 8.3 percent. Average hourly earnings gained 0.1 percent in February and average weekly hours were up one-tenth to 33.8. This is positive for income, but after a burst of gasoline powered consumer inflation in February we may not see much increase in real disposable income for the month. Still, household financial obligations are historically low right now and that means that consumers are able to take on some debt even in the absence of strong gains in real disposable income. By themselves, the monthly jobs numbers would imply 2012Q1 real GDP growth somewhat higher than the current near two percent forecast. If we keep getting strong jobs numbers it would be reasonable to expect upward revisions to late 2011/early 2012 GDP. But we have to work with the numbers we are given and GDP components still point to subdued growth in the current quarter. The U.S. trade gap widened to -$52.6 billion in January as the value of petroleum imports increased by $1.2 billion for the month. Non-petroleum imports of goods also widened significantly, by $2.8 billion in January. This could show up as a boost to inventory accumulation in the current quarter, partially offsetting the drag from net exports. Total consumer credit increased by $17.8 billion in January as auto loans increased.
Click here for the complete Comerica Economic Weekly, with forecasts for next week’s economic releases and an updated data calendar: CMAEconWeekly030912.