THE BASIS POINT

Lowest Jobless Claims Since February

Initial Jobless Claims
-381,000 for week ended December 3
-Down 23,000 from previous week’s revised 404,000 (was 396k)
-4-week moving average 393,250, down 3,000
-Below 400k signals improving jobs picture
-This is the lowest level since February, and the second lowest reading since the bankruptcy of Lehman Brothers in September 2008. This is seasonally adjusted data and, while very positive, may be clouded by Thanksgiving. Thanksgiving and Easter always make for difficult adjustments because they are two holidays which float around on the calendar. Next Thursday’s report will be important to confirm this dropping trend (this report is released weekly).

Consumer Credit
From late yesterday: Consumer Credit was +$7.6 billion. The largest component is non-revolving credit which, presumably, reflects strong auto sales.

Wholesale Trade
Inventories – Month/Month change +1.6 %. Previous was -0.1%. This gives some strength to 4thQGDP but if consumers do not buy these goods then 1Q2012 GDP will take a small hit.

The ongoing discussion about EU debt is part of the broader context of the world economy. The US is showing weak recovery from recession. Fiscal concerns will likely cause recession in many EU nations. In China growth is slowing and they have a looming currency and banking crisis.