Weekly Economic Update for the Week of January 11, 2010

C.W. Copeland & Associates presents

Weekly Economic Update for the Week of January 11, 2010

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Quote of the week."Wisdom is found only in truth."- Johann Wolfgang Von Goethe

Jobless rate stays at 10.0%.Hopes were high on Wall Street that unemployment would fall back to single digits, but at least things stayed flat for December. The positives: the 10.0% figure was better than the 10.1% reading economists polled by Dow Jones Newswires expected, and revised November figures showed the economy actually added 4,000 jobs two months ago.¹

Service sector expands. The Institute for Supply Management's services index came in at 50.1 for December, meaning marginal growth - and a rise from November's 48.7 mark. ISM's service sector employment index improved to 44.0 in December from 41.6 a month earlier.²

Interpreting pending home sales.They fell 16.0% in November, but consider some factors. A wave of buyers raced to exploit tax credits in October, so we were primed for a fall - and winter isn't a prime time to buy or sell. In the big picture, the National Association of Realtors noted that pending home sales for November 2009 were 15.5% above levels of a year before.³

More orders, bigger stockpiles.According to the Census Bureau, factory orders went north 1.1% in November; analysts had expected about half that gain. Wholesale inventories rose 1.5% last month (best month since October 2004) and wholesale sales rose 3.3% (strongest month since January 2008).^4,5

2.68% gain to start 2010. Yes, that was how much the S&P 500 rose in the first trading week of the year. A January effect sent the NASDAQ 2.12% higher and the Dow 1.82% higher as well. Friday morning, the CBOE VIX hit its lowest level in 19 months.^6,7

% Change	Y-T-D	1-Yr Chg	5-Yr Avg	10-Yr Avg
DJIA	+1.82	+21.46	+0.03	-0.78
NASDAQ	+2.12	+43.30	+2.19	-4.03
S&P 500	+2.68	+25.86	-0.69	-2.06
Real Yield	1/8	1 Yr Ago	5 Yrs Ago	10 Yrs Ago
10YrTIPS	1.41%	1.97%	1.80%	4.34%

(Source: CNNMoney.com, ustreas.gov, bls.gov, 1/8/10)^6,8,9,10

Indices are unmanaged, do not incur fees or expenses, and cannot be

invested into directly. These returns do not include dividends.

Riddle of the week. There is a kind of sweet bean that never grows in a garden. What is it?

Contact my office or see next week's Update for the answer.

Last week's riddle: A man jumped out of a small plane without a parachute. When he hit the ground, he wasn't injured at all. Why?

Last week's riddle answer:The plane was parked on the ground.

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C.W. Copeland
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