U.S. manufacturing expanded in January primarily due to new orders and production. The January 2012 ISM Manufacturing Survey increased +1.0 percentage points to 54.1% PMI. December PMI was revised down, from 53.9% to 53.1% in the ISM's annual revisions. The revisions changed mainly due to the U.S. department of Commerce seasonal adjustments algorithm modifications. The revisions overall show there was less decline over summer 2011 than originally reported. Seems the 2008 financial crisis blew out the statistical seasonal adjustment algorithm beyond just S&P's housing statistics.

New Orders increased +2.8 percentage points to 57.6% with Petroleum & Coal leading the charge. Yet December new orders were revised downward, from 57.6% to 54.8%.

A New Orders Index above 52.1%, over time, is generally consistent with an increase in the Census Bureau's real series on manufacturing orders.

The S&P Case Shiller home price index shows a -3.7% decline from a year ago over 20 metropolitan housing markets and a -3.6% decline for the top 10 housing markets from November 2010. Home prices are back to early 2003 levels. S&P on the continued falling home prices:

The trend is down and there are few, if any, signs in the numbers that a turning point is close at hand.

Below is the yearly percent change in the composite-10 and composite-20 Case-Shiller Indices. These are not seasonally adjusted, but comparing from November 2010.

People spent less and saved more in December. The Personal Income and Outlays report covers individual income, consumption and savings. Consumer spending was basically flatlined, or -0.02% from last month, while disposable income increased by 0.4%. Personal income increased 0.5% That great holiday shopping record sales hype did not materialize in the aggregate spending statistics, as we pointed out in the retail sales overview. The personal income & outlays report is seasonally adjusted.

Personal consumption expenditures are often called consumer spending and in real dollars, or adjusted for price increases, declined -0.1% from November. Real Personal Consumption Expenditures, or PCE, are about 70% of GDP. We saw mediocre personal consumption for the quarter, which rose only 2%. Real means chained to 2005 dollars, or adjusted for inflation. Below is a graph of real PCE.

Q4 GDP 2011 came in at 2.8%.. Here is the original BEA GDP report. Q3 2011 GDP remained the same at 1.8%. Real GDP for 2011 is 1.7% for the year. 2010 saw a 3.0% real increase in GDP. Quarterly GDP is reported annualized.

New Orders in Durable Goods, advance report, increased +3.0% for December 2011. November durable goods new orders jumped by 4.3% and October was a 0.1% increase. This means for all of Q4, we have an increase in durable goods new orders.

Manufacturing new orders surged 3.9% for December. November manufacturing new orders increased 6.2% but October declined -1.1%.

Core capital goods new orders increased 2.9%, after declining -1.2% in November and -0.9% in October. Core capital goods is an investment gauge for the bet the private sector is placing on America's future economic growth.

In December, New Residential Single Family Home Sales decreased -2.2%, or 307,0000 annualized sales. This report has a ±13.2% monthly margin of error and November single family home sales were significantly revised, from +1.6% to +2.3%. So much for that recovery, new single family home sales are -7.3% below December 2010 levels, which was 331,000 homes. New Home Sales are at a record low, going all the way back to 1963.

New Home Sales for the entire year, on aggregate, are also at a record low of 302,000 units, going all the way back to 1963.

The December 2011 Residential construction report showed Housing starts dropped -4.1% from November's revised 685,000, to a level of 657,000. This is +24.9% above December 2010, or 526,000 housing starts. Housing starts decline was due to apartments, 5 units or more of one building structure, which dropped -27.8% in one month.

The yearly percentage change is 3.4%. While still at record lows, it's a slight improvement and the best we've had since 2008, but from the graph below, one can see how badly the bubble burst on residential real estate.

The December Consumer Price Index, which measures inflation, had no change, or zero from last month. This is the second month in a row for zero inflation. The flat line was caused by a -1.3% energy decrease. Gas alone decreased -2.0% in a month. Food increased 0.2%. For the year, not seasonally adjusted, the Consumer Price Index for all Urban Consumers (CPI-U) has risen 3.0%. That's the largest year to year increase since 2007. 2010 saw a 1.5% yearly increase.

The Federal Reserve's Industrial Production & Capacity Utilization report shows a +0.4% increase for December 2011 Industrial Production. This report is also known as output for factories and mines. Manufacturing alone jumped +0.9%. November's industrial production was revised downward to a -0.3% decrease.

Utilities increased -2.7% in December and the Fed blames warm weather causing a demand decline.  Mining industrial production increased +0.3%. Motor Vehicles & Parts increased 0.6% for the month. Business equipment increased +0.8% for December.

December 2011 Retail Sales increased 0.1%. Minus autos & parts retail sales dropped -0.2%. November retail sales were revised up to 0.4% from 0.2%. Retail sales are up 6.5% from the same time last year. Electronics and Appliance stores plunged -3.9% during December, the holiday season. Gas sales dropped -1.6%. Retail sales are reported by dollars, not by volume, so dropping prices often reports as a decline in sales.

Total retail sales are $400.6 billion for November. While electronics and appliances plunged -3.9% from last month, it's not the real driver of consumer spending, autos are.