December 29, 2011

Jobless Claims Up: How It Relates To Jan 6 Jobs Report

December 29, 2011

Jobless Claims Up: How It Relates To Jan 6 Jobs Report

Initial Jobless Claims
-381,000 for week ended December 24

-Up 15,000 from previous week’s revised 366,000 (was 364k)

-4-week moving average was 375,000, down 5,750

-Weekly up but 4-week average still trending down

-Below 400k signals improving jobs picture

-Average claims since 2000 are 390k, so even with the weekly rise last week, the 1-week and 4-week numbers are still better than long-term trend. But how this decrease in jobless claims translates into jobs remains to be seen. There is imperfect correlation between jobless claims and jobs. If the 4-week average is 375,000, then 1,500,000 people lost jobs in the last 4 weeks. But this number doesn’t capture newly hired people so it’s difficult to draw conclusions on this dataset alone. Markets won’t make any meaningful trading moves until the December jobs report is released next Friday, January 6. Consensus estimates call for 150,000 non-farm jobs created.

Pending Home Sales (November 2011)
-Pending Home Sales Index was 100.1 (full report-with methodology at bottom)

-7.3% higher than October, highest in 19 months

-5.9% higher than November 2010

-April 2010 was last time index was higher (111.5) as buyers rushed in to get tax credit

-For existing single family homes entered into sales contracts expected to close in 60 days

-This is a good number but: 33% of realtors report cancelled deals on existing home sales

-Also this data comes from NAR which just said it had been publishing incorrect home sales data for the past 5 years, so let’s let this play out a few months.

Chicago PMI
The Business Barometer Index for the Chicago region was 62.5 for December. Any value above 50 indicates expansion. Keep in mind that this is the wholesale side. If the consumer does not increase purchasing then the wholesale index will diminish.

Bloomberg Consumer Comfort Index (week ended 12/25)
This is a survey index of consumer attitudes. The level fell from -45.0 to -47.5. This says more about consumer psyche than economics. For example, in this survey the consumer stated that he intended to buy less, his personal finances were worse, but that current state of the economy was better. Go figure.

by Dick Lepre & Julian Hebron