Tatum/Roulston Report

As we mentioned last month the spike in business conditions in January was sudden and significant. Although the velocity this month slowed, if we look at the trend caused by last month, it shows stability more that specific improvement. The markets and The Tatum Survey seem to be telling us the same thing. We are in a holding pattern. Yes January changed the trend pattern but many of the other components of the Survey including backlogs, capital expenditures, employment and capital availability all show a flat trend that seems to represent a “wait and see” type holding pattern. This is contrary to January and the uptrend that we have seen in the index over the last six months. We would argue trends seem to reflect that inventories got to low and have now been rebuilt with some limited spending. But without capital availability and more importantly visibility in confidence in the outlook a January blip is the exception. The general trend in many of these factors is flat with some (good old American) optimism but a lack of catalyst or stimulus (outside of a faint government effort) is leaving businesses wanting for optimism and consistency.

Looking forward we think the economy is going to have a tough time fighting the political backstabbing that although is causing a lack of government action( a good thing) is more and more looking like the politicos will regulate as a substitute for legislate and continue to confuse, anger and penalize businesses thru rhetoric and partisan bickering.