THE BASIS POINT

Fundamentals 11/17: Today’s Stat Recap. Jobless Claims Down Trend?

Initial Jobless Claims
-388,000 for the week ended November 12
-Down 5,000 from previous week’s revised 393,000 (was 390k)
-4-week moving average 396,750, down 4,000
-Still high but if sub-400k holds/drops, we’ve got improving trend. But bigger picture that I see is that Jobless Claims and Unemployment Rate are not as important as the Labor Participation Rate. The Unemployment Rate will start to fall as people’s 99 weeks of benefits expire. Jobless Claims may be falling only because there are fewer people to layoff.
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Housing Starts
-Starts down .3%: Seasonally Adjusted Annual Rate 628k (last was 658k)
-Permits (highest since March 2010): Seasonally Adjusted Annual Rate 653k
-We need 1,500,000 Housing Starts to keep pace with population growth. We are still selling off the excess generated during the Housing Bubble when Starts peaked in January 2006 at 2,273,000 million. Too much of that excess was sold to people who could not afford the mortgage payments. I don’t see recovery to the “natural” level of 1,500,000 anytime before 2013.

Consumer Metrics
The Consumer Metrics Absolute Demand Index of on-line discretionary spending has leveled off after dropping notable from October 26 – November 9. It still is pointing to lower GDP growth in the current quarter.

Philadelphia FedManufacturing Index
-October manufacturing index +3.6 vs. +8.7 September
-Second month of growth following three months of contraction
-0 is dividing line between expansion/contraction
Full report here and chart below

Europe
Eurozone Debt concern relocated today to Spain. The longer any solution is put off for the larger will be the magnitude of the disaster.

Bloomberg Consumer Comfort Index
This Index improved from -51.6 to -50.0. Perhaps the name should be changed to the Consumer Discomfort Index.