The month of November commenced with the ISM manufacturing survey showing growth in the factory sector with readings of indexes tracking new orders, employment, and production higher than levels seen in recent months. This was followed by an increase in October private sector payrolls which point to gains in hiring. In the first ten months of the year, firms have increased payrolls by 112,000 each month, on average vs. an average loss of 465,000 jobs in the first ten months of 2009. The main message from these economic reports is that economic conditions are improving. Retail sales, another major economic indicator, confirm this message. October retail sales moved up 1.2% after a 0.7% gain in September. A noticeable increase in auto sales (+5.0%) also helped to lift overall retail sales, in addition to positive contributions from most other major components of retails sales during October. October retail sales also start the fourth quarter on a positive note as the level of October retail sales exceeds the third quarter average.
In related news, the inventory-sales ratio of businesses held steady at 1.27 in September, reflecting gains sufficient to leave the ratio unchanged. This ratio is not signaling an undesirable accumulation of inventories.
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