Daily Archives: December 31, 2008 @ 12:38 pm (Wednesday)

2008-12-31 USER

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Karim writes:

  • The conference board survey of labor conditions (jobs plentiful less jobs hard to get) has been a good leading indicator of payrolls and worsened in December from -28.4 to -35.8.
  • The ABC survey also worsened last week despite the further decline in gas prices, suggesting the labor market continues to deteriorate.

MBA Mortgage Applications (Dec 26)

Survey n/a
Actual 0.0%
Prior 48.0%
Revised n/a

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MBA Purchasing Applications (Dec 26)

Survey n/a
Actual 320.90
Prior 316.50
Revised n/a

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MBA Refinancing Applications (Dec 26)

Survey n/a
Actual 6733.80
Prior 6758.60
Revised n/a

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Initial Jobless Claims (Dec 27)

Survey 575K
Actual 492K
Prior 586K
Revised n/a

 
Karim writes:

  • Initial claims fall 94k to 492k but Labor Dept states data probably skewed by holidays and auto shutdowns

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Continuing Claims (Dec 20)

Survey 4400K
Actual 4506K
Prior 4370K
Revised 4366K

 
Karim writes:

  • Continuing claims, reported with a 1 week lag to initial claims, rose 140k to a new cycle high of 4506k.

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Jobless Claims ALLX (Dec 27)

 
Karim writes:

  • Would expect payroll decline for December to be larger than last month’s 533k drop (market expects slight improvement to -475k).

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NAPM Milwaukee (Dec)

Survey n/a
Actual 30
Prior 35
Revised n/a


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Senate Minority Leader McConnell to obstruct fiscal adjustment?

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McConnell Urges Caution in Debate on Economic Stimulus Measure

Dec. 29 (Bloomberg) — Senate Minority Leader Mitch McConnell said he wants to slow consideration of the economic stimulus package Democrats are drafting, warning that the measure sought by President-elect Barack Obama invites wasteful spending.

“A trillion-dollar spending bill would be the largest spending bill in the history of our country at a time when our national debt is already the largest in history,” McConnell, a Kentucky Republican, said in a statement. “As a result, it will require tough scrutiny and oversight. Taxpayers, already stretched to the limit, deserve nothing less.”

McConnell called for giving lawmakers and the public at least one week to review the legislation once it has been written. He also said he wanted Senate committee hearings on the measure, rather than immediate floor consideration.

His demand, in a Senate where minority Republicans will still have the power to block legislation, could stall a drive by Democrats to approve legislation soon after Obama’s Jan. 20 inauguration.


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Re: Sector financial balances and fiscal stimulus

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(email exchange)

Good stuff, thanks!

(Of course, I prefer to say ‘removal of fiscal drag’ rather than ‘fiscal stimulus!’ )

>   
>   On Tue, Dec 30, 2008 at 3:17 PM, Scott wrote:
>   
>   FYI . . . looking at the data on the sector financial balances for
>   Q1, Q2, and Q3 of 2008. All data are in $billions and are in
>   annualized nominal terms:
>   
>   
>    Sector: Q1 Q2 Q3
>    Household -195 110 24
>    Total Prvt -135 176 106
>    Fed Govt -346 -666 -544
>    Total Public -558 -899 -815
>   
>   Note that in Q2, the -300 change in the fed govt balance is
>   almost exactly equal to the +300 change in HH sector
>   balance. Biz sector in Q2 actually reduced net saving a bit,
>   which is what it normally does when sales/profits improve
>   (expand capacity, etc.). Note also that Q2 was when real
>   GDP was over 2%, up from 0% previously. So . . . clearly the
>   stimulus “worked” in that it improved HH balance sheets
>   while raising real GDP growth. Only problem was that the
>   stimulus wasn’t large enough and didn’t last long enough,
>   Note that smaller Fed govt deficit in Q3 corresponds to
>   smaller HH balance and slower real GDP growth in that
>   quarter.
>   
>   HH sector had been retrenching since 2006:3, when balance
>   peaked at -478B. Fed govt high was -176B in 2006:4, and
>   had been going into further deficit thereafter, so this is “the
>   hard way” you talk about in which automatic stabilizers offset
>   the slowdown, albeit not nearly enough as real GDP growth
>   deteriorated. The Q2 stimulus package was a clear “jolt” that
>   corresponds to “the easy way” of stabilization via direct fiscal
>   intervention and greater real GDP growth than otherwise,
>   albeit not nearly enough, again.
>   
>   Anyone thinking that fiscal policy doesn’t “work” needs to
>   explain this data combined with quarterly real GDP growth.
>   
>   Scott
>   


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