Jobless Claims Dip, Still in Range; Trade Deficit Jumps

As previously discussed, the real economy seems to be muddling through, and at firmer levels than the first half of the year.

The trade report will probably result in Q2 GDP being revised down to just below 1%, but up from the .4% reported for Q1

So Q3 still looks like it will be at least as strong as q2 and likely higher with lower gasoline prices and Japan coming back some.

With corporate profits still looking reasonably strong, corporations continue to demonstrate they can do reasonably well even with low GDP growth and high unemployment.

And with a federal deficit of around 9% of GDP continually adding income, sales, and savings I don’t see a lot of downside to GDP, sales, and profits, though a small negative print is certainly possible.

Jobless Claims Dip, Still in Range; Trade Deficit Jumps

August 11 (Reuters) — New U.S. claims for unemployment benefits dropped to a four-month low last week, government data showed on Thursday, a rare dose of good news for an economy that has been battered by a credit rating downgrade and falling share prices.

Initial claims for state unemployment benefits fell 7,000 to a seasonally adjusted 395,000, the Labor Department said, the lowest level since the week ended April 2.

Economists polled by Reuters had forecast claims steady at 400,000. The prior week’s figure was revised up to 402,000 from the previously reported 400,000.

The Federal Reserve said on Tuesday economic growth was considerably weaker than expected and unemployment would fall only gradually. The U.S. central bank promised to keep interest rates near zero until at least mid-2013.

Hiring accelerated in July after abruptly slowing in the past two months. However, there are worries that a sharp sell-off in stocks and a nasty fight between Democrats and Republicans over raising the government’s debt ceiling could dampen employers’ enthusiasm to hire new workers.

The continued improvement in the labor market could help to allay fears of a new recession, which have been stoked by the economy’s anemic growth pace in the first half of the year.

A Labor Department official said there was nothing unusual in the state-level claims data, adding that only one state had been estimated.

The four-week moving average of claims, considered a better measure of labor market trends, slipped 3,250 to 405,000. Economists say both initial claims and the four-week average need to drop close to 350,000 to signal a sustainable improvement in the labor market.

The number of people still receiving benefits under regular state programs after an initial week of aid dropped 60,000 to 3.69 million in the week ended July 30.

The number of Americans on emergency unemployment benefits fell 26,309 to 3.16 million in the week ended July 23, the latest week for which data is available.

A total of 7.48 million people were claiming unemployment benefits during that period under all programs, down 89,945 from the prior week.

Trade Gap Grows

The US. trade gap widened in June to its largest since October 2008, as both U.S. imports and exports declined in a sign of slowing global demand, a government report showed on Thursday.

The June trade deficit leapt to $53.1 billion, surprising analysts who expected it to narrow to $48 billion from an upwardly revised estimate of $50.8 billion in May.

Overall U.S. imports fell by close to 1 percent, despite a rise in value of crude oil imports to the highest since August 2008. Higher volume pushed the oil import bill higher, as the average price for imported oil fell to $106 per barrel after rising in each of the eight prior months.

U.S. exports fell for a second consecutive month to $170.9 billion, as shipments to Canada, Mexico, Brazil, Central America, France, China and Japan all declined.

Claims/Bernanke on asset sales


Karim writes:

Initial claims fall 14k to 442k; with downward revisions to past few weeks allowing 4wk avg of initial claims to move to 453.8k; the lowest since 9/08.

This is the part that Bernanke omitted in today’s testimony that was included in his Feb 10 testimony.

“I currently do not anticipate that the Federal Reserve will sell any of its security holdings in the near term, at least until after policy tightening has gotten under way and the economy is clearly in a sustainable recovery. ”

Now just has sequencing more open-ended:

“In any case, the sequencing of steps and the combination of tools that the Federal Reserve uses as it exits from its currently very accommodative policy stance will depend on economic and financial developments and on our best judgments about how to meet the Federal Reserve’s dual mandate of maximum employment and price stability.”

Claims/Philly Fed


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Karim writes:

Data tug-of-war continues as manufacturing rebounding under inventory rebuild, but labor market stays weak and indicating that underlying demand not improving all that much

  • Claims weaker than expected
  • Initial up 15k to 576k with prior week revised +3k
  • Continuing claims up 2k (prior week revised up 37k), extended benefits down 48k and emergency benefits up 92k
  • Overall, weak labor market data
  • Philly Fed firmer than expected in keeping with inventory rebuild that is driving manufacturing
  • National ISM may exceed 50 in next 2-3mths, consistent with inventories adding about 2% to GDP gwth in H2


August July
Activity 4.2 -7.5
Prices paid 10.0 -7.5
New Orders 4.2 -2.2
Shipments 0.6 -9.5
# of Employees -12.9 -25.3



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2009-05-07 USER


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Nonfarm Productivity QoQ (1Q P)

Survey 0.6%
Actual 0.8%
Prior -0.4%
Revised -0.6%

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Nonfarm Productivity TABLE 1 (1Q P)

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Nonfarm Productivity TABLE 2 (1Q P)

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Unit Labor Costs QoQ (1Q P)

Survey 2.7%
Actual 3.3%
Prior 5.7%
Revised n/a

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Unit Labor Costs ALLX (1Q P)

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Initial Jobless Claims (May 2)

Survey 635K
Actual 601K
Prior 631K
Revised 635K

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Continuing Claims (Apr 25)

Survey 6350K
Actual 6351K
Prior 6271K
Revised 6295K

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Jobless Claims ALLX (May 2)


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2009-04-09 USER


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Karim writes:

View on US EconomySharp drawdown of inventories to lead to restocking to lead to positive contribution to Q2 growth (which will still be negative overall). This has reduced ‘depression’ view in markets. But fact remains that consumer spending (70% of GDP) will remain dire for some time as: labor market remains in tatters, massive household wealth loss from equities/housing, and savings rate continues to climb.

Savings is being fed by the growing deficit spending so that consumption and savings can now be sustained, as some of the recent consumption numbers seem to indicate. So flat consumption (off a low base) and any inventory build (off an extremely low base) has a chance of getting q2 to modestly positive gdp.

Fiscal policy will help.

Yes, adding more than 6% to gdp in q2 from where it would have been other wise.
That’s historically been sufficient to restore gdp to positive territory and fuel the next credit boom.

But with massive output gap (-7% according to CBO last week), economy faces deflationary threat for period ahead (see Fed minutes from yesterday). Fed to keep rates near zero through at least 2010.

Europe

  • German industrial production -2.9% in Feb (after -6.1% in Jan) and Italian industrial production -3.5% in Feb
  • Looks like Q1 at least -6 to -7% for European GDP

Yes, they recover only well after we do.

Report today calling for another 25bp cut to 1% in May, plan to announce framework to buy corporates, no clarity if 1% to be the low for o/n money.

ECB also ‘low for long’: Austrian Governor Nowotny today stated he expects inflation to remain below the ECB’s 2% target over the ‘medium term’, giving the bank room to keep rates at historically low levels for ‘some time’.

Other labor markets weakening sharply as well:

  • Chief Economist of Economic and Social Institute (affiliated with Japanese Cabinet Office) stated unemployment in Japan could climb from 3milllion to 5million between July and December this year
  • Canadian employment down 61k in March (was down over 90k prior month) and unemployment rate up from 7.7% to 8.0%
  • Australian employment down 34k in March, with unemployment rate rising from 5.2% to 5.7%
  • Both looking to substantial fiscal support as well.


    Trade Balance (Feb)

    Survey -$36.0B
    Actual -$26.0B
    Prior -$36.0B
    Revised -$36.2B

     
    Karim writes:

    • Surprise was trade balance improving from -36.bn to -26bn (-44bn to -35bn in real terms)
    • But cause for improvement was 5.1% collapse in imports (not caused by energy); capital goods imports -6%; industrial supplies -9.3%; consumer goods -3.9% and not a sign of a healthy economy

    Right, imports should be picking back up with April numbers which won’t be out for quite a while as the additional fiscal adjustments pile on to the automatic stabilizers which already may have the deficit north of 6$ of gdp annually.

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    Exports MoM (Feb)

    Survey n/a
    Actual 1.6%
    Prior -5.9%
    Revised n/a

     
    Karim writes:

  • Exports up 1.6% after 20% fall in prior 4mths
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    Imports MoM (Feb)

    Survey n/a
    Actual -5.1%
    Prior -6.7%
    Revised n/a

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    Exports YoY (Feb)

    Survey n/a
    Actual -16.9%
    Prior -16.5%
    Revised n/a

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    Imports YoY (Feb)

    Survey n/a
    Actual -28.8%
    Prior -22.8%
    Revised n/a

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    Trade Balance ALLX (Feb)

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    Import Price Index MoM (Mar)

    Survey 0.9%
    Actual 0.5%
    Prior -0.2%
    Revised -0.1%

     
    Karim writes:

  • Import prices up 0.5%, -0.7% ex-petroleum, and -0.6% from China.
  • Yes, any recovery will see crude prices pushing up the inflation indicators, however recent Saudi price cuts may indicate this could be delayed some.

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    Import Price Index YoY (Mar)

    Survey -14.7%
    Actual -14.9%
    Prior -12.8%
    Revised -12.7%

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    Import Price Index ALLX 1 (Mar)

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    Import Price Index ALLX 2 (Mar)

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    Initial Jobless Claims (Apr 4)

    Survey 660K
    Actual 654K
    Prior 669K
    Revised 674K

     
    Karim writes:

  • Initial claims down 20k to 654k from upwardly revised prior week 674k; continuing claims continue to defy gravity, rising another 112k
  • While unemployment will continue to go up until nominal growth exceeds productivity increases, claims should start falling soon.

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    Continuing Claims (Mar 28)

    Survey 5800K
    Actual 5840K
    Prior 5728K
    Revised 5745K

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    Jobless Claims ALLX (Apr 4)


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2009-04-02 USER


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Initial Jobless Claims (Mar 28)

Survey 650K
Actual 669K
Prior 652K
Revised 657K

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Continuing Claims (Mar 21)

Survey 5590K
Actual 5728K
Prior 5560K
Revised 5567K

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Jobless Claims ALLX (Mar 28)

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Factory Orders YoY (Feb)

Survey n/a
Actual -18.8%
Prior -20.5%
Revised n/a

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Factory Orders MoM (Feb)

Survey 1.5%
Actual 1.8%
Prior -1.9%
Revised -3.5%

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Factory Orders TABLE 1 (Feb)

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Factory Orders TABLE 2 (Feb)

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Factory Orders TABLE 3 (Feb)


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2009-03-26 USER


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GDP QoQ Annualized (4Q F)

Survey -6.6%
Actual -6.3%
Prior -6.2%
Revised n/a

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GDP YoY Annualized Real (4Q F)

Survey n/a
Actual -0.8%
Prior 0.7%
Revised n/a

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GDP YoY Annualized Nominal (4Q F)

Survey n/a
Actual 1.2%
Prior 3.3%
Revised n/a

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GDP Price Index (4Q)

Survey 0.5%
Actual 0.5%
Prior 0.5%
Revised n/a

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Core PCE QoQ (4Q)

Survey 0.8%
Actual 0.9%
Prior 0.8%
Revised n/a

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Personal Consumption (4Q)

Survey -4.4%
Actual -4.3%
Prior -4.3%
Revised n/a

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Initial Jobless Claims (Mar 21)

Survey 650K
Actual 652K
Prior 646K
Revised 644K

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Continuing Claims (Mar 14)

Survey 5475K
Actual 5560K
Prior 5473K
Revised 5438K

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Jobless Claims ALLX (Mar 21)


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2009-02-26 USER


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Durable Goods Orders (Jan)

Survey -2.5%
Actual -5.2%
Prior -2.6%
Revised -4.6%

 
Karim writes:

  • -5.2% m/m; December revised from -2.6% to -4.6%
  • Ex-aircraft and defense -5.4% m/m and -34.4% last 3mths at an annualized rate

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Durable Goods Orders YoY (Jan)

Survey n/a
Actual -26.4%
Prior -20.1%
Revised n/a

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Durables Ex Defense MoM (Jan)

Survey n/a
Actual -2.3%
Prior -7.5%
Revised n/a

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Durables Ex Transportation MoM (Jan)

Survey -2.2%
Actual -2.5%
Prior -3.6%
Revised -5.5%

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Durable Goods ALLX (Jan)

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Initial Jobless Claims (Feb 21)

Survey 625K
Actual 667K
Prior 627K
Revised 631K

 
Karim writes:

  • Initial claims up 36k to new cycle high of 667k
  • Continuing claims up another 14k to new cycle high of 5112k

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Continuing Claims (Feb 14)

Survey 5025K
Actual 5112K
Prior 4987K
Revised 4998K

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Jobless Claims ALLX (Feb 21)

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New Home Sales (Jan)

Survey 324K
Actual 309K
Prior 331K
Revised 344K

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New Home Sales Total for Sale (Jan)

Survey n/a
Actual 342.00
Prior 353.00
Revised n/a

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New Home Sales MoM (Jan)

Survey -21.%
Actual -10.2%
Prior -14.7%
Revised -9.5%

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New Home Sales YoY (Jan)

Survey n/a
Actual -48.2%
Prior -42.7%
Revised n/a

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New Home Sales Median Price (Jan)

Survey n/a
Actual 201.10
Prior 223.20
Revised n/a

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New Home Sales TABLE 1 (Jan)

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New Home Sales TABLE 2 (Jan)


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2009-02-12 USER


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Advance Retail Sales MoM (Jan)

Survey -0.8%
Actual 1.0%
Prior -2.7%
Revised -3.0%

 
Karim writes:

  • Retail sales rise 1% in January for first rise in 7mths.
  • December revised to down 3% from down 2.7%.
  • 3mth annualized rate of change improves from -25.5% to -24.3%.

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Advance Retail Sales YoY (Jan)

Survey n/a
Actual -9.7%
Prior -10.5%
Revised n/a

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Retail Sales Less Autos MoM (Jan)

Survey -0.4%
Actual 0.9%
Prior -3.1%
Revised -3.2%

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Initial Jobless Claims (Feb 7)

Survey 610K
Actual 623K
Prior 626K
Revised 631K

 
Karim writes:

  • Initial claims drop 8k to 623k
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    Continuing Claims (Jan 31)

    Survey 4800K
    Actual 4810K
    Prior 4788K
    Revised 4799K

     
    Karim writes:

    • Continuing claims rise 11k to new cycle high
    • Chicago Fed Prez Evans yesterday that further policy accommodation was needed

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    Jobless Claims ALLX (Jan 31)

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    Business Inventories MoM (Dec)

    Survey -0.9%
    Actual -1.3%
    Prior -0.7%
    Revised -1.1%

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    Business Inventories YoY (Dec)

    Survey n/a
    Actual 0.9%
    Prior 2.9%
    Revised n/a


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    2009-02-05 USER


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    Nonfarm Productivity QoQ (4Q)

    Survey 1.6%
    Actual 3.2%
    Prior 1.3%
    Revised 1.5%

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    Nonfarm Productivity TABLE 1 (4Q)

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    Nonfarm Productivity TABLE 2 (4Q)

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    Unit Labor Costs QoQ (4Q)

    Survey 2.9%
    Actual 1.8%
    Prior 2.8%
    Revised 2.6%

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    Unit Labor Costs ALLX (4Q)

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    Initial Jobless Claims (Jan 31)

    Survey 580K
    Actual 626K
    Prior 588K
    Revised 591K

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    Continuing Claims (Jan 24)

    Survey 4795K
    Actual 4788K
    Prior 4776K
    Revised 4768K

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    Jobless Claims ALLX (Jan 31)

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    Factory Orders YoY (Dec)

    Survey n/a
    Actual -18.7%
    Prior -13.8%
    Revised n/a

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    Factory Orders MoM (Dec)

    Survey -3.1%
    Actual -3.9%
    Prior -4.6%
    Revised -6.5%

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    Factory Orders TABLE 1 (Dec)

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    Factory Orders TABLE 2 (Dec)

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    Factory Orders TABLE 3 (Dec)


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