U.S. IMPORT AND EXPORT PRICE INDEXES - SEPTEMBER 2013

U.S. import prices advanced 0.2 percent for the second consecutive month in September, the U.S. Bureau of Labor Statistics reported today.

The increase in each of the past two months was led by rising fuel prices.

The price index for U.S. exports rose 0.3 percent in September after falling the previous six months.

US Corporate Profits at All-Time High as GDP Growth Holds at 2.5 Percent

The Bureau of Economic Analysis released new data showing that corporate profits reached an all-time nominal high in the second quarter of 2013. 

Profits before tax rose to 12.53 percent of GDP from 12.22 percent in the previous quarter, as the following chart shows.

That was just fractionally short of the all-time high of 12.60 percent reached in the final quarter of 2011.

At the same time, the BEA confirmed that GDP grew by 2.5 percent, the same as the August estimate.

What Will the Government Shutdown Cost?

The most important issue facing the US markets and economy is the pending government shutdown. If this expands into a debt default, the implications reach worldwide. As I accurately forecast last week:

“Despite a busy economic calendar this week will focus on Washington and the inability to compromise on important decisions. There are two key questions:

• Can a government shutdown be avoided?
• Will the U.S. default on its debt, by failing to raise the debt ceiling?”

The background and discussion still reads well, so I urge readers to check that out as a refresher.

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THE EMPLOYMENT SITUATION -- AUGUST 2013

Total nonfarm payroll employment increased by 169,000 in August, and the unemployment rate was little changed at 7.3 percent, the U.S.Bureau of Labor Statistics reported today.

Employment rose in retail trade and health care but declined in information.

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