THE BASIS POINT

Fundamentals 8/25: Jobless Claims Up, Consumer Spending Down

First, let’s note that tomorrow has potential for significant volatility. The two key things are (1) revised 2Q GDP and (2) Bernanke’s Jackson Hole speech which is being viewed as QE3 Yes/No.

Initial Jobless Claims
-417,000 for week ended August 20
-Up 5,000 from previous week’s revised 412,000
-4-week Moving Average 402,500, up 4,000 from previous week
-The jobs market is still quite weak

Consumer Metrics
This index of on-line discretionary spending, while not widely discussed, may be the best leading indicator of GDP. It started moving higher just after July 4 but has slowed its growth since the equity instability started.

Bloomberg Consumer Comfort Index
-Index was -47 for week to August 21
-Index ranges from 100 meaning every participant had a positive response, to minus 100 meaning all views were negative.
-This is a B-list reports based on a weekly, random survey of people with incomes above $100,000.

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