US employment falls, global manufacturing picks up

Plenty of US economic data yesterday. Most were negative.

The greatest pessimism was generated by the closely-followed nonfarm payrolls report. MarketWatch reports:

Perhaps providing the smoking gun indicating that the nation's economy has entered a recession, government data released Friday showed a net reduction in U.S. nonfarm payrolls for the first time in more than four years.

As employers cut back their hiring, nonfarm payrolls fell by an estimated 17,000 in January, the Labor Department said. This is the first decline since August 2003.

Also falling in January was auto sales.

Belt-tightening by uneasy consumers took a heavy toll on January U.S. auto sales, with most of the industry reporting numbers Friday that confirmed what the industry already suspected: It's going to be a rough year.

According to AutoData Corp., overall car sales fell last month to a seasonally-adjusted annual rate of just 15.2 million vehicles. That puts the industry on the weakest pace since wrapping up a period of heavy discounts at dealerships in late 2005.

Construction spending in December was poor too.

Spending on U.S. construction projects fell by 1.1% in December as outlays on private residential construction took another tumble, government data showed Friday.

But the University of Michigan's consumer sentiment index rose in January from December.

The index rose to 78.4 in January from 75.5 in December. Economists surveyed by MarketWatch had expected a result of 79.0. The mid-January reading was 80.5...

As did manufacturing activity.

The ISM index rose to 50.7% from 48.4% in December, the ISM said...

The new orders index remained below 50%, but improved by 2.6 points to 49.5%, indicating a slower pace of decline.

The rise in the ISM index helped the JP Morgan Global Manufacturing PMI rise to 52.3 in January from 51.6 in December but at the cost of higher inflationary pressures, with the global input price index jumping to 71.2, its highest level since July 2006, from 67.2 the previous month.

Apart from the US, manufacturing in the euro area also picked up slightly, with the RBS/NTC final Eurozone Manufacturing PMI for January rising to 52.8 from 52.6 in December, but the UK manufacturing PMI fell to 50.6, the lowest since August 2005, while even China's manufacturing cooled in January along with its weather.