September printing shipments were up +$55 million in current dollars compared to September 2006. On an inflation adjusted basis, however, they were down -$188 million, a -2% decline. The inflation-adjusted data are the best estimation we have for judging physical volume of printing by U.S. commercial shops.
The unemployment report showed a +166,000 gain in payroll jobs, with unemployment remaining at 4.7%. The most important part of these data are not getting headline recognition in the press, and that is the decline in the household survey of -250,000 jobs. The household survey is a far better indicator of current economic conditions, while payroll data lag changes in the economy by about 6 months. It is not uncommon for payroll employment to get better in the early stages of a recession and to actually get worse at the beginning of a recovery. So we're watching the household data more carefully.
Yesterday's ISM Manufacturing Index was quite disappointing. Though still showing growth in the manufacturing sector, its only bright spots were manufacturing employment and exports. Every other aspect of the index, especially inventories held by manufacturers and their customers, and the prices they are paying were decidedly negative.
The Fed's move to decrease interest rates is weighing hard on the markets, and will be shown to be quite inflationary. The word "stagflation" is being mentioned more and more in the economic analyses we see, and we can certainly understand that the risk of such has grown considerably with this latest cut.
More details in my column on Monday.