General: A steady stream of bad news dominated the end of 2007 as well as the beginning of 2008. The general outlook for this year is dismal. In a recent poll of recognized economic pundits, 40 percent expected a recession this year. The culprits are well known. First and foremost, there are the twin crises of housing and the subsequent credit crunch, followed by escalating energy prices and steadily rising food prices, the latter a consequence of strong global demand and the US government's rush into ethanol as alternative fuel.
GDP: +4.9% in Q3 over Q2, unchanged from the previous estimate
Consumer Prices: +4.3% in November 2007
Industrial Production: +2.1% in November 2007
Producer Prices: +7.2% in November 2007
Consumer Confidence Index: 88.6 in December, slightly up (!) from November's 87.8
Unemployment: 5.0% in December, a shocking increase from 4.7% in November
Trade Balance: -$806.4 for latest 12 months through October
Housing Industry: Housing starts in November fell 3.7% compared to October, and housing permits decreased 1.5% in November from the previous month.
Automotive Production: 681,324 units in December 2007, a decline of 11.2% against December 2006. In 2007, a total of 10,751,149 units were produced, or 4.5% less than in 2006. The hardest hit segment was the medium/heavy truck sector, the production of which went down 39.6% in 2007. Sales in 2007 fell 2.5%. Except for Toyota (+3.1%), all major brands experienced sales reductions.
Steel Production: 8.040 million mt were produced in November, an increase of 8.5% compared to last year. In the first eleven months of 2007, a total of 89.7 million mt were produced, a decline of 2.1% over last year.
Special Focus: The indexes of the Institute for Supply Management (ISM) have become trusted indicators of economic trends. Here are the highlights from their December report:
Purchasing Managers Index (PMI): 47.7 in December from 50.8 in November; trend is "contracting".
New Orders: 45.7 in December, down from 51.9 in November; trend is "contracting".
Production: 43.7 in December, down from 51.9 in November; trend is "contracting".
Employment: 48.0 December, from 47.8 in November; trend is "contracting".
Backlog of orders: 43.0 in December, from 41.5 in November; trend is "contracting".
Customers' Inventories: 51.5 in December from 49.0 in November; trend is "too high".