Bernanke qualifying a key phrase from 1mth ago.

Feb 3
Even so, with output growth likely to be moderate for awhile and with employers reportedly still reluctant to add to their payrolls, it will be several years before the unemployment rate has returned to a more normal level.

March 1
Even so, if the rate of economic growth remains moderate, as projected, it could be several years before the unemployment rate has returned to a more normal level. Indeed, FOMC participants generally see the unemployment rate still in the range of 7-1/2 to 8 percent at the end of 2012. Until we see a sustained period of stronger job creation, we cannot consider the recovery to be truly established.

Standard response on cmmdty prices: “the most likely outcome is that the recent rise in commodity prices will lead to, at most, a temporary and relatively modest increase in U.S. consumer price inflation–an outlook consistent with the projections of both FOMC participants and most private forecasters. That said, sustained rises in the prices of oil or other commodities would represent a threat both to economic growth and to overall price stability, particularly if they were to cause inflation expectations to become less well anchored.”

Karim writes:


  • Encouraging news with index at its highest level since May 2004 and employment component highest since 1973
  • Gap between orders and inventories remain wide
  • Some strength in orders and shipments likely reflect inventory rebuild from huge Q4 drawdown vs entirely reflecting a change in demand

ISM Feb Jan
Index 61.4 60.8
Prices paid 82.0 81.5
Production 66.3 63.5
New Orders 68.0 67.8
Backlog of orders 59.0 58.0
Supplier deliveries 59.4 58.6
Inventories 48.8 52.4
Customer inventories 40.0 45.5
Employment 64.5 61.7
Export Orders 62.5 62.0
Imports 55.0 55.0

  • “A continued weak dollar is increasing the cost of components purchased overseas. It is going to force us to increase our selling prices to our customers.” (Transportation Equipment)
  • “We continue to see significant inflation across nearly every type of chemical raw material we purchase.” (Chemical Products)
  • “Our plants are working 24/7 to meet production demands.” (Fabricated Metal Products)
  • “Prices continue to rise, while business limps along at last year’s pace.” (Nonmetallic Mineral Products)
  • “Overall demand is off 10 percent.” (Plastics & Rubber Products)

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