THE BASIS POINT

Fundamentals 10/20: Jobless Claims & Existing Home Sales Down

Initial Jobless Claims
-403,000 for the week ending October 15
-Down 6,000 from previous week’s revised 409,000 (was 404k)
-4-week moving average was 403,000, down 6,250 from previous week
-While the 4-week average continues to decline, this is not a picture of a healthy jobs market. It appears more as a picture of a jobs market which is weak and too slowly recovering from the worst stages of an illness.
Initial Jobless Claims

Existing Home Sales
-4,910,000 (seasonally adjusted annual rate) for September
-Was -3.0% month/month but +11.3% year/year
-18% of contracts didn’t close, same as Aug. Up from 9% in Sept 2010
-Lots of inventory which must be sold but economic uncertainty and tough mortgage qualifying restrain buying.
Full report of Existing Home Sales
Existing Home Sales

Philadelplia Fed
-General Business Conditions Index 8.7, up from September’s -17.5
-Measures manufacturing, 0 is line between growth/contraction
-First positive reading in 3 months
Full report and chart

Leading Economic Indicators
LEI weas +0.2% for September. The pop in LEI is almost entirely due to a drop in the 10-year Treasury yield. At present, LEI puts too much stock in the value of monetary policy.