Thursday
Jul052012

Initial Jobless Claims Drop to Lowest Level Since 5/18

In what has become a rare occurrence recently, initial jobless claims for the latest week actually came in lower than expected.  While forecasts were calling for a level of 385K, actual claims claim in at 374K, which was the lowest weekly reading since May 18th.

This week's lower than expected reading in jobless claims caused the four-week moving average to drop by 1.5K, which was also the largest drop since May 18th.  You know it has been bad when a 1.5K drop in the four-week moving average is considered something to get excited about.

On a non-seasonally adjusted (NSA) basis, initial jobless claims dropped by 3K, which was actually pretty impressive given the fact that we typically see an increase in claims in the week ahead of July 4th on a non-seasonally adjusted basis.  In fact, you have to go all the way back to 2005 to find a week where NSA claims dropped during the current week.

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Monday
Jul022012

ISM Manufacturing Drops Below 50

It has already been a bad several weeks for economic data, but today's release of the ISM Manufacturing report for June only made matters worse.  While economists were expecting a reading of 52.0, the actual reading came in at a much weaker than expected level of 49.7, which is the worst monthly reading in nearly three years (July 2009).  

As shown in the table below, only three of the indicator's ten sub-components are currently above 50, and only two showed increases compared to last month's reading (Supplier Deliveries and Customer Inventories).  Compared to one year ago, the subindices are also showing similar weakness, where Customer Inventories and Imports are the only two components that increased over the last year.

The charts below highlight the historical readings of each of the ISM Manufacturing sub components.  As shown, most of these measures made multi-year lows in June.  For example, Production, New Orders, Prices Paid, and Export Orders all showed their weakest readings since either April or May of 2009.

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Thursday
Jun212012

Philly Fed Plummets

Like it's NY counterpart last week, today's release of the Philadelphia Fed Manufacturing report was significantly lower than expected (-16.6 vs 0.0), coming in at its lowest level since August.  As shown in the table to the right, there wasn't much in the way of bright spots below the surface either.  Of the nine sub-indices, the only one that was not negative was number of employees.  As shown in the chart below, while this month's reading was low, it remains above the lows from last Summer, and if (big if) those lows hold, the uptrend from the recession lows in 2008-2009 will remain intact.

Below we highlight the historical readings of the Philly Fed's sub-indices.  Unlike the overall index, several of the sub-indices have broken below their lows from last Summer.  These include Delivery Times, Prices Paid, Prices Received, and Average Workweek.  While the new lows in these indices are not a positive for the economy, they at least signal that there is not much in the way of inflation pressures on the horizon.

Friday
Jun152012

Empire Manufacturing Plummets

Today's release of the Empire Manufacturing report for June came in weaker than expected (2.29 vs 12.50) and showed a large drop from last month's reading of 17.09.  It was the largest one month decline since since June 2011, and further put the growth prospects of the US economy in doubt.  Across the board, this month's report was weak as not a single subcomponent of the current conditions index increased during the month.

The two large charts below highlight the historical readings of the headline Empire Manufacturing Index (current conditions and expectations six months out) as well as plans for capital expenditures and technology spending.  Below those two charts we provide smaller charts showing each of the subcomponents of the main index (current conditions and expectations six months out). If there are any silver linings to this month's report (and we admit it's a stretch), it is that plans for technology spending and capital expenditures six months out both increased and that the majority of subcomponents still remain positive.  How long that lasts, however, is anybody's guess.

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Thursday
Jun142012

Jobless Claims Weaker Than Expected

Hopes of an improvement in the employment outlook were diminished this morning when initial jobless claims came in higher than expected (386K vs 375K).  This represents the third straight week that claims have been above 380K, making the readings in the 360Ks from earlier this year seem like more of an anomaly than a trend.

As a result of the recent elevated readings, the four week moving average has now risen to 382K, which is the highest reading since April.

On a non-seasonally adjusted basis, initial claims rose to 374K this week.  What makes this week's reading unique is that it was the first time in recent memory that the current reading was above the average for similar weeks between 2000 and 2012.

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Friday
Jun012012

ISM Manufacturing Weaker Than Expected

Today's ISM Manufacturing report for the month of May came in modestly weaker than expected (53.5 vs. 53.8), although given the weaker tone of other global PMI indices, it probably could of been worse.  The table below highlights the change over the last month and year for the overall index and each of its subcomponents.  As shown, there is not much to get excited about.  The only component that rose this month was New Orders (from 58.2 to 60.1).  Furthermore, five of the of the ten subcomponents are currently below 50 which is the dividing line between growth and contraction.  Charts of the ISM headline index and each subcomponent are included below.

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Thursday
May242012

Initial Jobless Claims Inline With Estimates

Weekly initial jobless claims were inline with forecasts today, coming in at 370K from last week's revised reading of 372K.

Given the lower readings of the last few weeks, the four-week moving average is now also down to 370K, which is the lowest level since April 6th.

Finally, on a non-seasonally adjusted basis, jobless claims actually saw a slight increase, rising from 325K to 328K, which is still below the 346K average for this week going back to 2000.

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Thursday
May172012

Philly Fed Pretty Much Erases All Hope of A Rally Today

This morning's release of the Philly Fed Manufacturing report for the month of May pretty much erased all hopes of a market rally.  With economists expecting a level of 10.0, the actual reading was not only weaker but it was also negative (-5.8). As shown in the table to the right, the weakness was pretty much across the board as six out of nine sub-components came in at negative levels.

The charts below show charts of the headline Philly Fed report and each of its subcomponents going back to 1980 with recessions highlighted in gray.  As shown, this month's negative reading in the headline index was the first negative reading of the year and the lowest reading since September.

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Tuesday
May152012

NAHB Housing Sentiment Rises to Highest Level Since 2007

Today's release of the NAHB Housing Sentiment index came in better than expected and (29 vs 26) currently sits at its highest level since May 2007. In this month's report all three subcomponents also showed increases, and are all at or just near their highest levels since 2007.  On a regional basis, the West was the only area where homebuilder sentiment declined.  In the Northeast, Midwest, and South, however, sentiment increased.  

It is important to remember that even as the NAHB Index and its various subcomponents are hitting multi-year highs, they all remain below 50, which is the dividing line between positive and negative sentiment.  Therefore, while sentiment is clearly getting less worse, there is a ways to go before we can say homebuilders are positive.

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Tuesday
May152012

Empire Manufacturing Rebounds

Today's NY Fed Manufacturing report for May came in stronger than expected (17.1 vs 9.5) and helped to reverse part of the decline we saw in April when the index came in at 6.6.  Even after this month's improvement, however, the index still remains below the highs we saw earlier this year.

Although the overall index for current conditions rose this month, the outlook over the next six months declined for the fourth straight month.  Likewise, plans for Capital Expenditures and Technology Spending also decreased during the month. 

The charts below show the changes in each of the subcomponents of the NY Fed Manufacturing report.  For each component we show the current conditions (blue line) as well as the outlook over the next six months.  In most cases the outlook for the next six months is above the level for current conditions, which makes sense given the fact that it is always natural to expect business to get better in the future.

With that in mind, it is often interesting to see where manufacturers are expecting conditions to get worse than they currently are.  The components that fit this criteria are Inventories, Number of Employees, and Average Workweek.  Finally, while the outlook for shipments six months from now is still above the current outlook, this month we saw a sharp drop in the outlook for shipments even as the current conditions for shipments rose to its highest level in a year.

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Thursday
May102012

Initial Jobless Claims Fall For Second Straight Week

Initial jobless claims came in slightly lower than expected this week (367K vs. 369K) making it the second straight week of lower than expected claims and the second straight week back in the 360K range.  The fact that claims seem to be down from their highs in mid-April helps to reverse some of the negative sentiment generated from last week's weak jobs report.

The four week moving average for initial claims also declined this week for the first time since March and now stands at 379K.

While seasonally adjusted claims dropped this week, non-seasonally adjusted claims rose by 5K to 338.4K.  This is the lowest reading for this time of year since 2008 and below the average since 2000 of 355K for the current week.

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Thursday
May032012

ISM Services Report Disappoints

While the ISM manufacturing report earlier in the week surprised to the upside, today's report from the ISM on the Non-Manufacturing sector was considerably weaker than expected (53.5 vs 55.5), and was the lowest monthly reading since December.  Combining the ISM Manufacturing and Non-Manufacturing reports together, this month's reading came in at 53.7, which was also the lowest reading since December.

In the table below, we show this month's ISM Non-Manufacturing readings by sector, as well as where each sector stood one month and one-year ago.  While this month's headline reading was down versus last month, four of the sub-components actually showed increases on the month while four showed declines.  Compared to last year, however, we saw five sectors post declines and only three rise.

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Thursday
May032012

Stronger Than Expected Initial Claims

This morning's release of initial jobless claims came in better than expected (365K vs. 377K), erasing a multi-week trend of weaker than expected reports.  With this week's reading of 365K, jobless claims are now essentially back to levels we saw in March.

On a four-week moving average basis, however, jobless claims still showed a modest rise, although as long as next week's reading comes in below 388K, this reading will also begin to decline.

 Finally, on a non-seasonally adjusted basis jobless claims dropped to 331K.  This is the lowest reading for the last week of April since 2008, as well as below the average reading since 2000 for the last week of April (352K).

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Tuesday
May012012

Strongest ISM Manufacturing Since June 2011

The April ISM Manufacturing Index was released this morning, and not only was the report stronger than expected (54.8 vs. 53.0), it was also the highest monthly reading since June 2011.  So much for the economy slowing down...at least for today.  

The table below shows the various sub-components of the ISM Manufacturing report and where they stand with respect to their readings last month and last year.  Compared to last month, all but two sub-components (Backlog Orders and Business Inventories) were unchanged or higher.  The employment component of the index rose to 57.3 from last month's 56.1 reading, which provides some encouragement for this Friday's employment report.  Compared to last year, however, this month's readings were less robust.  Last year at this time, the only subcomponents of the index that were lower than they are now were Production and Customer Inventories.

Below we show long-term charts of each of the sub-components listed above.

Thursday
Apr052012

Initial Claims Drop to Four Year Low

This morning's release of initial jobless claims dropped to 357K which is the lowest level since April 2008.

The four week average also declined this week to 362K, which also represents the lowest level in four years.

Finally, on a non-seasonally adjusted basis jobless claims fell to 319K.  For the first week of April this is the lowest reading since 2007, and well below the historical average (362K) for this week going back to 2000.

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Wednesday
Apr042012

Weaker Than Expected ISM Non Manufacturing

Today's ISM Non-Manufacturing report for March declined from 57.3 down to 56.0 and was also weaker than the expected 56.8.  In the table below, we summarize the current levels of the ISM Index and each of its subcomponents.  As shown, only three of the index's ten subcomponents increased versus last month (Inventories, Employment, and Imports).  

Relative to last year at this time, March also saw a decline from 56.3 down to 56.0.  Likewise, with the exception of Business Activity, Employment, and Imports, all of the index's subcomponents saw declines versus the same time last year.  Finally, looking at the combined ISM Manufacturing and Non Manufacturing reports, March saw an overall decline in the pace of growth (56.7 down to 55.7).


Monday
Apr022012

March ISM Manufacturing Stronger Than Expected

Today's release of the ISM Manufacturing report for March came in better than expected (53.4 vs 53.0).  In the table and charts below, we highlight the various subsectors of the report and how they fared in the latest month.  of the ten subsectors of the report, all but two were at 50 or above this week, which is indicative of growth.  The only two categories where there was contraction were in Supplier and Customer Inventories.  Of the ten subsectors, four showed increased growth compared to last month, and six declined.  Compared to one year ago, though, the overall ISM Manufacturing Index and seven out of ten subsectors are now lower.

One encouraging aspect of this month's report is illustrated in the number of industries experiencing overall growth and growth in production, new orders, and employment.  In all of these categories, the number of industries surged compared to last month, which indicates some broadening of economic strength.

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Thursday
Mar292012

Jobless Claims Worse Than Expected

After revising last week's initial jobless claims level up by 14K, this week's claims report showed a drop of 5K to 359K, which was 9K above forecasts.  This week's higher than expected claims number was a bit out of the norm for investors who have become accustomed to better than expected numbers on the jobs front.  Prior to today, there had only been one worse than expected report over the last eight weeks.

With the upward revision to last week's number, the four week moving average also moved up to 365K, which is still only 10K above the recent low.

On a non-seasonally adjusted basis, jobless claims were unchanged at 319K.  For this particular week in March, this week's reading is the lowest since 2007, and below the historical average of 354K.

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Thursday
Mar222012

Jobless Claims Fall to Lowest Level Since March 2008

While economic data around the world generally disappointed overnight, the US held up its end of the bargain this morning when jobless claims came in slightly better than expected (348K vs 350K), falling to their lowest level since March 2008.

The four-week moving average of jobless claims also declined to 355K.

On a non-seasonally adjusted basis, initial jobless claims declined by nearly 25K to 315.6K.  For the third week of March, this is the lowest reading since 2007 and well below the average since 2000 for this particular week.

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Monday
Mar192012

NAHB Sentiment Unchanged From February

Bulls on the housing market received a bit of negative news this morning as the NAHB Homebuilder Sentiment Index came in weaker than expected at 28 (expectations were for a reading of 30).  Although today's report was weaker than expected, it was unchanged from February and remains at its highest level since June 2007.

The table to the right shows the current readings of each of the NAHB sentiment index's subcomponents and regional indices, as well as the readings for the prior month.  As shown, while Present Sales were down slightly from last month, Future Sales were at their highest reading since June 2007 and Traffic was unchanged.  

In terms of the regional indices, sentiment was up in three out of four regions.  The West was the only region to see a decline in the month, and it was a large one at that.  For the Northeast, Midwest, and South, this month's readings were at or near multi-year highs.  Below we highlight charts of the NAHB Sentiment index (gray shaded) and each of its subcomponents.  In each chart, recessions are highlighted in gray.  Finally, while the current readings of the index and its subcomponents are up off their lows, sentiment remains well below 50, which is the dividing line between positive and negative sentiment.

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