The Atlanta Fed's macroblog provides commentary and analysis on economic topics including monetary policy, macroeconomic developments, inflation, labor economics, and financial issues.

Authors for macroblog are Dave Altig, John Robertson, and other Atlanta Fed economists and researchers.

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February 02, 2006

Just Confirming: The Fourth Quarter Was Not Too Hot

You probably already have as much confirmation as you care for, but if not have a gander at today's productivity and costs report from the Bureau of Labor Statistics. The Nattering Naybob has plenty of details and discussion, but here's the short version, from Reuters:

The Labor Department said nonfarm business productivity fell at a 0.6 percent annual rate in the fourth quarter, marking the first decline since the first quarter of 2001. That pushed unit labor costs up at a 3.5 percent pace -- the fastest growth in a year and well above market expectations.

OK, not good.  But then, you knew that.  On the sunnier side of the street, the early returns on January have been pretty good.  The Capital Spectator suggests that Monday's report on consumer spending gives the optimists "a reason to cheer," and Barry Ritholtz follows up this morning with more positive news on the retails sales front -- consistent with The Skeptical Speculator's observations about rising consumer confidence (at least by the measure of the Conference Board).  SS also had a look at yesterday's release on manufacturing activity index from the Institute for Supply Management and believes the "latest indicators from the US show that economic activity remains relatively robust".

So far, so good then.

February 2, 2006 in Data Releases | Permalink


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I'm hoping Wall St. starts to view the Fed's rate hikes combined with these kinds of numbers that they've engineered a "soft landing" in the economy.

Posted by: muckdog | February 02, 2006 at 07:49 PM

Totally wierd trading day. Weak number, under forecast, combined with an upward adjustment to last months number. If you were long treasuries and were able to weather the storm(and it was quite a storm) you were proven right by the end of the day. The market rallied. I don't know if it is because of the drop in stocks or expectations about the soft landing.

The Fed Chairman's testimony to Congress next month will be eagerly dissected. I look for very choppy trading until then.

Posted by: Jeff | February 03, 2006 at 10:21 PM

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