Thursday
Sep272012

Jobless Claims Surprise to the Downside

In a sea of weaker than expected reports this morning, jobless claims provided a glimmer of hope.  While economists were forecasting weekly claims to come in at a level of 379K, actual claims came in at 359K, which was the lowest reading since July 20th.

Following this week's drop in weekly claims, the four-week moving average dropped to 374K for its first weekly drop since August 10th.  It has now been 26 weeks since the four-week moving average for jobless claims made its current post-recession low of 363K on March 30th.  This is the second longest streak of the recovery, behind last year's 31 week streak without seeing a new low.

 On a non-seasonally adjusted basis, jobless claims dropped by 30K down to 300.7K.  This is the lowest level for the current week since 2007 and below the historical average for the current week of 316.8K.

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Thursday
Sep202012

Jobless Claims Stuck in the 380Ks

Initial Jobless Claims came in higher than expected today (382K vs 375K), representing the second straight week where claims were above 380K.  The fact that claims have had such trouble gaining traction to the downside in recent weeks is a troubling sign for the bulls.

With weekly claims remaining elevated, the four-week average for jobless claims rose for the fifth straight week to 377.8K.  After getting within 4K of making a new post-recession low, claims have been trending higher in recent weeks and are now 15K above their post recession low of 363K from 3/30.  It has now been 25 weeks since jobless claims made their last post-recession low, which is the second longest streak without making a new low since the recession ended.  The longest such streak was 31 weeks last year (March - October), and at the rate things are going now, it is increasingly likely that the current streak will eclipse that.

On a non-seasonally adjusted basis, jobless claims rose by 28K to 327.8K.  Although this is a large weekly increase and above the average (326.2K) for the current week going back to 2000, it is still the lowest weekly reading for this particular week since 2007.

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Tuesday
Sep182012

NAHB Housing Index Rises to Highest Levels Since 2006

The NAHB Homebuilder Sentiment Index came in at the highest level since June 2006 this morning, coming in at a level of 40 versus estimates for an increase to 38.  In case you haven't already noticed, the residential housing market is coming back!

As shown in the table to the right, both the index and each of its subcomponents showed increases in September.  While Future Sales hit their highest levels since early 2007, Present Sales and Traffic both came in at their highest levels since the summer of 2006.

On a region by region basis, sentiment increased across the board.  The only area of the country that did not see a new multi-year high in homebuilder sentiment was the Northeast.

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Thursday
Sep132012

Initial Claims Rise to Highest Levels Since Mid July

Due in part (but not wholly) to disruptions caused by Hurricane Isaac, initial jobless claims for the latest week rose to their highest level (382K) since mid-July and were well above the consensus forecast of 370K.  Making matters worse, last week's claims reading was also revised slightly higher from 365K to 367K.  Interestingly, as pointed out by zerohedge earlier, there has not been a single week in 2012 where claims have been revised lower.

Because of the increase and the upward revisions, the four week moving average of jobless claims rose from 371.8K to 375K, which was also the highest level since mid-July.  This now marks the 24th straight week where claims have not made a new post-recession low, and it is the second longest streak since the recession ended in mid 2009.

Perhaps the one bright spot of this morning's report was the non-seasonally adjusted (NSA) claims number.  In the latest week NSA claims fell from 309.5K down to 297.4K.  For the current week, this is the lowest reading since 2007 and below the average of 315.3K for the current week going back to 2000.

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Thursday
Sep062012

ISM Non Manufacturing Surprises to the Upside

Unlike Tuesday's ISM Manufacturing report which showed across the board weakness, this morning's release of the ISM Non-Manufacturing report was almost the complete opposite.  While economists were expecting a reading of 52.5, the actual number came in at 53.7.  Combining both the ISM Manufacturing and Non Manufacturing surveys and accounting for each sector's weight in the overall economy, the combined ISM index rose from 52.3 to 53.2.

The table below summarizes the current readings of the ISM Non Manufacturing Index's sub-components and compares those levels to last month's reading and one year ago.  Relative to July's report, seven out of ten subcomponents saw increases this month, while just three (Business Activity, New Orders, and Inventories) showed declines.  Compared to last year, we saw an equal number of rising (5) and falling (5) components.

The charts below show the historical readings of each of the ISM Non Manufacturing Index's ten subcomponents going back to 1997.  While Business Activity and New Orders both saw modest declines, there were large increases in Backlog Orders, Inventory Sentiment, Employment, and Prices Paid.

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Thursday
Sep062012

Jobless Claims Fall

This week's release of initial jobless claims fell by 12K to 365K from last week's revised reading of 377K.  At current levels, initial claims are 13K above their post-recession low of 352K.

The four-week moving average of jobless claims was essentially unchanged at 371K, which is 8K above the post-recession low.  It has now been 23 weeks since the four-week moving average of initial claims made a new post-recession low, which is the second longest stretch since the end of the recession.  The longest streak was 31 weeks from March through October of last year.

On a non-seasonally adjusted basis, jobless claims fell by 4K to 307.8K.  This is lowest level for the current week since 2007, and below the average for the current week dating back to 2000 (323K).  All in all jobless claims are hardly painting a robust picture, but they are steadily showing long-term improvement.

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Tuesday
Sep042012

Weaker Than Expected ISM Manufacturing Report

Today's ISM Manufacturing report for August came in weaker than expected (49.6 vs 50.0 est) for the fourth straight month, and was below 50 for the third straight month.  The last time the ISM Manufacturing report was weaker than expected was from August through December of 2008.  At a level of 49.6, this month's level was also the lowest since August 2009.

The charts below show the current levels for the ISM Manufacturing report and each of its subcomponents, as well as their levels last month and one year ago.  As shown, even though the ISM headline reading was just slightly below fifty, only three of the index's ten subcomponents managed to stay above the fifty level, which was unchanged from last month.  Compared to a year ago, however, the ISM is considerably weaker.  Last year at this time, only two subcomponents were below fifty, and all but one of the ten are lower now than they were then.  Amidst the weakness, though, even though this month's report showed broad weakness, we did see an increase in the number of industries seeing overall growth and growth in new orders.

Finally, the charts below show the historical charts of each of the ISM Manufacturing Index's ten subcomponents.  The most notable weakness in this month's report was the drop in Production and New Orders which both fell to their lowest levels since the Spring of 2009.

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Thursday
Aug162012

Philly Fed vs Empire Manufacturing

With the two states sharing a border, the economies of New York and Pennsylvania are certainly similar, but they do not always move in the same direction.  A case in point is the August Empire Manufacturing and Philly Fed reports.  The August reports for both indicators have now been released, and as shown in the chart below, the General Business Conditions indices for the two reports are moving in opposite directions.  While the Philly Fed report showed improvement this month, the Empire Manufacturing report declined.  Granted, this month's divergence can probably be attributed to the Empire report playing catch up relative to Philly (Philly is still more negative than Empire), but it just goes to show that regions that share the same geography don't always see identical business conditions.

The charts below compare the various components of both the Empire Manufacturing and Philly Fed on a historical basis.  Like the overall General Business Conditions Indices, this month the Philly subcomponents generally rose while the New York components saw declines.

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Thursday
Aug162012

Philly Fed Weaker Than Expected

Today's Philly Fed report for August came in weaker than expected (-7.1 vs. -5.0), but it did manage to improve from last month's deeply depressed reading (-12.9).  Like the overall headline reading, most of the subcomponents of the index were also negative in this month's report.  Unfilled Orders were the weakest at -16.2, followed by Average Workweek (-14.6) and Delivery Time (-12.2).  The only two positive components were Prices Paid (11.2) and Prices Received (2.8).

If in fact the overall Business Conditions of the Philly Fed report has put in a short-term bottom here, it would set the stage for an attractive setup similar to the 1995 period when growth slowed but eventually got back on track without the economy falling into recession.

Below are historical charts of each of the Philly Fed's subcomponents.  While all of the subcomponents are still in negative territory, we would note that all but three of them (Unfilled Orders, Shipments, and Number of Employees) were less worse in August than they were in July.  It's a start at least.

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Thursday
Aug162012

Jobless Claims Inline With Expectations

This week's report of initial jobless claims came in roughly inline with expectations (366K vs. 365K).  This is up slightly from last week's revised reading of 364K.

Looking at the four-week moving average, we didn't quite hit a new post-recession low this week, but it's getting close.  Over the last four-weeks, jobless claims have averaged 363.8K, which is 0.8K above the post recession low of 363K from March 2012.  Looking at this number, it is hard to believe that the Fed would be considering more easing when jobless claims are on the decline and at their lowest levels of the recovery.

Finally, on a non-seasonally adjusted basis, jobless claims in the latest week were 315.8K.  This is the lowest reading for the current week since 2007, and it's slightly below the average of 321K for the current week going back to 2000.

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Wednesday
Aug152012

NAHB Housing Sentiment Rises to Highest Level Since 2007

The NAHB Homebuilder sentiment survey came in better than expected this month (37 vs. 35) for the fourth straight month, rising to its highest level since February 2007.  As shown in the table to the right, each of the four subcomponents rose this month and also saw their highest levels since 2007.  With regards to the regional indices, only the midwest and south saw increases this month, while the northeast and west saw declines.  The northeast saw the largest decline during the month, but some of that weakness may be attributable to the record warmth in the region this summer.

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Wednesday
Aug152012

Empire Manufacturing Disappoints

Today's release of the August Empire Manufacturing report came in weaker than expected (-5.85 vs 7.0), and was at the lowest level since last October.  Not only was the current conditions index weak, but the index for conditions six months out was also at its lowest point (15.2) since October.  The table to the right highlights the current readings of the Empire Manufacturing report's subcomponents.  As shown, four of the components are currently negative while five are positive.  Looking out six months from now, there are also four negative readings and seven positive components.

 

The charts below show the monthly readings of the current conditions and expectations six months out for each of the Empire Manufacturing report's subcomponents.  As shown in the charts, the majority of components showed declines this month.  It's only one report, but if the Empire Manufacturing report is any indication, the long awaited pick-up in the economy may have to wait another month.


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Thursday
Aug092012

Jobless Claims Lower Than Expected

First time jobless claims in the latest week were lower than expected (361K vs 370K) and are now down by 31K from their highs in June.  Furthermore, current levels of claims are now just 9K above their lowest levels since 2008.

Based on the four-week moving average, claims actually rose modestly to 368.3K.  This is the 19th week in row that the four-week moving average has not made a new post-recession low.  If the current pace continues, however, we could see a new low (363K) next week.

Finally, on a non-seasonally adjusted basis, initial jobless claims rose by 5K to 317.6K.  For the current week of August, this week's reading is the lowest since 2007, and it is well below the historical average of 340K.

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Friday
Aug032012

ISM Services Surprises to the Upside

After a disappointing ISM Manufacturing report on Wednesday, today's ISM Services report came in better than expected (52.6 vs 52.0) and improved from last month's reading of 52.1.  Looking at the internals of this month's report shows that there was an even split between components showing improvement versus those that didn't.  Business Activity was one area of notable strength, increasing from 51.7 last month to 57.2 in July.  Compared to a year ago, however, we are still down, as seven components declined and three improved.

The charts below show the historical readings of the ISM Non Manufacturing as well as the combined ISM Manufacturing and Non Manufacturing indices.  At a level of 52.3, the combined reading is still down modestly from last year, but it rose 0.5 points from last month and is hardly indicative of recessionary levels that some of the regional Fed indices have been approaching.

The chart below shows the levels of each of the ISM Non Manufacturing subcomponents on a historical basis since 1997.  As shown, Business Activity showed one of the largest increases during the month, while Backlog Orders and Imports showed the largest decreases.

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Thursday
Aug022012

Second Straight Week of Better Than Expected Claims

Today's initial jobless claims report was better than expected for the second straight week, coming in at a level 365K versus expectations for 370K.  While today's number will have no impact on tomorrow's nonfarm payrolls report, it is the second better than expected employment report of the week, which should provide some boost to sentiment.

The four-week moving average for jobless claims also fell modestly to 365.5K.  While it has now been eighteen weeks since the four-week moving average for jobless claims made a post recession low, the direction of claims is moving in the right direction and getting back near new lows.

On a non-seasonally adjusted (NSA) basis, claims fell to 310.5K, which was the lowest reading since May 2008 and the lowest reading for the current week since 2007.

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Wednesday
Aug012012

ISM Manufacturing Below Fifty For Second Straight Month

Today's release of the ISM Manufacturing report for July showed a slight improvement from last month, but at a level of 49.8, today's report was weaker than expected (50.2) and below 50.

The table below highlights each of the subcomponents to the headline ISM report and compares how each currently stands relative to the last month and year.  As shown below, of the ten subcomponents to the index, five increased this month and five decreased.  Compared to a year ago, though, only two showed improvement (Business Inventories & Customer Inventories).  Looking ahead to Friday's employment report, the employment component of today's report is still above 50, but the fact that this component declined from last month doesn't provide much hope for a big pickup in jobs this month.  A better read on the employment picture would perhaps come from the employment component of the ISM Services report since that covers a larger portion of the economy, but since that report doesn't come out until 10:00 am Friday, we will not have that luxury this month.

Below we also provide charts of each of the categories listed in the table below.  Looking at these charts, there are certainly some disturbing trends.  For starters, export orders dropped to their lowest level since April 2009.  Additionally, the number of industries showing growth in New Orders and Production also dropped to three year lows this month.

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Thursday
Jul262012

Jobless Claims Fall Back to the 350K Range

Initial jobless claims rose considerably less than expected today as economists continue to struggle with seasonal adjustments.  While economists were looking for first time claims to come in at 380K, actual claims rose by only 353K.  This marks the fourth straight week where the weekly change in claims topped 10K which is actually the longest streak of weekly moves in excess of 10K since April 2011.

The four-week moving average in claims was even more encouraging.  At a current level of 367.3K, the four-week moving average is now down to its lowest level since March.

Given all the seasonal distortions (July 4th holiday , auto plant non-closures, etc.) in the current batch of jobless claims numbers, it may be best to look at the non-seasonally adjusted numbers (NSA).  On this basis, claims fell to 337K, which is the lowest for the current week since 2007, and below the average for this week (358K) going back to 2000.

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Thursday
Jul192012

Jobless Claims Back on the Rise

It looks like last week's sharp drop in jobless claims was just a mirage.  After dropping to a multi-year low last week, initial jobless claims rose 34K to 386K this week, representing the largest one-week increase since April 2011.  While investors got excited about last week's sharp decline, this week's increase pretty much erases all the optimism generated from last week's report.

Even after this week's increase, the four-week moving averaged still managed to post a modest decline this week, falling from 377K to 375.5K.  

Unfortunately, even the non-seasonally adjusted (NSA) reading for jobless claims this week was not very good.  NSA claims rose by nearly 11K to 453K from last week's reading of 442.2K.  While this was the lowest reading since 2008 for the current week, going back to 2000, the average NSA reading for the current week has been 441K, so the current level is above the historical average for this time of year.

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Thursday
Jul122012

Jobless Claims Fall to Lowest Level Since March 2008

Granted, it was a holiday shortened week, so the numbers could ultimately be revised, and skeptics will dismiss the figures as an anomaly due to the July 4th holiday.  That being said, today's jobless claims numbers were very good.  On a seasonally adjusted basis, initial jobless claims fell from 376K down to 350K.  This is the lowest weekly reading since march 2008!

With the largest single weekly decline in jobless claims since January, the four week moving average of jobless claims fell by 10K to 376.5K.  That is the lowest weekly reading since late May.

Skeptics of this week's jobless claims number are pointing to the non-seasonally adjusted (NSA) level of jobless claims, which rose from 370K up to 440K and saying that this is a more accurate representation of jobless claims.  Well, if you want to take that view, you have to make it an apples to apples comparison and look at prior levels of jobless claims at this time of year.

Taking that approach, the most recent week's level of NSA claims was the lowest reading for the July 4th week since 2007, and well below the average of 481K for the July 4th week going back to 2000.  In fact, since 2000 there have only been three other years where the level of NSA claims during July 4th week was lower (2005, 2006, 2007).

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Thursday
Jul052012

ISM Services Report Follows Manufacturing and Disappoints

Following in the footsteps of Monday's weaker than expected ISM Manufacturing report, today's ISM report on the Non-Manufacturing sector (Services) for the month of June was weaker than expected (52.1 vs. 53.0), coming in at the lowest level since January 2010.  While the report was weaker than expected, it is still indicative of growth in the Services sector as opposed to the Manufacturing sector, which is showing signs of contraction.

The chart below shows the historical readings for the ISM Services index going back to 1997.  Below that we show the combined ISM Manufacturing and Services indices weighted based on each sector's overall share of the US economy.  Given the fact that the Services sector is a much larger share of the US economy than Manufacturing, the combined index still remains above 50, but it is still at its lowest level since January 2010.

The table and charts below show the historical readings of the ISM Non-Manufacturing index's ten sub-components.  In this month's report, the only three sub-indices that increased were Inventory Sentiment, Employment, and Import Orders.  Relative to one year ago, however, only Inventory Sentiment and Import Orders showed any improvement.  In terms of inflation, the Fed currently has little to worry about on that front as the prices paid component of this month's report came in at 48.9, which is the lowest level since July 2009.  

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