…and even employment is moving in the right direction.
Courtesy of Econoday
Weekly New Jobless Claims were reported this morning at 466,000, an amazing surprise from the 495,000 consensus estimate and the revised downward 501,000 from the previous week. Of course more hiring is happening with the holiday shopping season kicking into high gear.
Courtesy of Econoday
But what of those 50,000 workers that UPS just recently announced that it was rehiring for the Christmas season? UPS drivers were complaining a lot about the stress in trying to get deliveries done—will many of these workers be kept on after the first of the year? An announcement this close to the Holiday Season is rather unusual and presents a pretty fast maneuver versus well thought-out planning ahead of time.
What many don’t seem to remember is that we are not looking for new claims to reach zero—300,000 weekly new claims would be a return to normality and a welcome level for the index. The charts above show what this looks like during better times. This week and next are going to be really big economic reporting periods. Beside the weekly new payroll claims above, look at what has been reported just in the last few days:
Courtesy of Econoday
Monday 11/23
Existing Home Sales—a blowaway number for October with an annualized 6.1 million sales versus annualized 5.7 million consensus estimate, 5.5 million in September and 4.7 million in May 2009. Supply of unsold homes on the market is now at a 7 months supply, down from 8 months in September and 10.2 months for the previous year period (6 months is the level needed that is considered for price stability).
Tuesday 11/24
ICSC-Goldman Store Sales—year-over-year increase in sales at major retail chains was up 3.3% over the previous year’s period, the best reading in over two years. The Redbook Report reported same store sales up 2.8% over the previous year’s period for chain stores, discount stores and department stores, with expectations for a 4.8% increase for November over October.
Courtesy of Econoday
After-Tax Corporate Profits—third quarter showed a sharp gain to $1.181 trillion annualized, up from $1.031 trillion in the prior quarter. Profits in the third quarter were up an annualized 71.9%, following a 24.5% in the second quarter. Profits are after tax but without inventory valuation and capital consumption adjustments. Corporate profits are still down 7.2 percent on a year-on-year basis, compared to down 19.2 percent in the second quarter.
S&P Case-Shiller Home Price Index—the top 10 cities saw prices rise 0.4 percent in September, on the low side of what is a long strong string of improvements. Year-on-year rates continue to improve, now down to the single-digit contraction at minus 8.5 percent for the index. A look at the quarter-to-quarter rate also shows steady improvement at a plus 3.1% for both the third and second quarters.
Courtesy of Econoday
Gross Domestic Products (GDP)—the first revision for third quarter GDP was revised somewhat lower at an annualized 2.8%, as compared to 3.5% initially reported. There will be one more revision for the third quarter at the end of December. But it will be fourth quarter GDP initially reported at the end of January that everyone will be watching for.
While many look to the downward revision as support for a long-awaited slowing to be sweeping into the economy, this seems to make for constant negative reading in the media and keeps investors uneasy about the market more than an actual event. Third quarter was somewhat plagued by a weaker September that constrained third quarter performance and economic growth, fourth quarter appears to be experiencing solid consumer spending throughout both October and November. We are seeing increases in housing purchases, further ramping up in manufacturing and an outlook for further economic growth both abroad and domestically, as just announced by the Federal Reserve in just the past couple of days.
Still the Best to Come…And It’s Here Already
On Monday, November 30th, we will get the Chicago PMI Report, showing manufacturing activity in that area. Remember that the Philadelphia Fed Report just reported a level of activity not seen in over 2½ years.
On Tuesday, December 1st, the ISM Manufacturing Index will be released by the Institute for Supply Management showing manufacturing activity for the nation as reported by the purchasing managers for the largest corporations.
On Wednesday, December 2nd, the Challenger Job-Cut and the ADP Employment reports will give provide a preview of what should be expected in the upcoming Employment Report due out on Friday.
On Thursday, December 3rd, Chain Store Sales will provide a peek at the success or failure of the holiday shopping season. Also on tap will be the release of the Productivity Report and the ISM Non-Manufacturing Index (service sectors).
And then, on Friday, December 4th, the Employment Report and Factory Orders Report will be released. The employment report—hard to believe that it is almost here already, should be a continuation of the trend that we have already seen, especially given the number above for new payroll claims just reported this morning. But more importantly, watch for the direction of the new revisions that will be made for the previous numbers in September and October.
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