Weekly Indicators: Black Friday Edition

- by New Deal democrat

This week's big number, without doubt, was the drop in initial jobless claims to 407,000, the lowest reading in two and a half years. At long last layoffs have broken to the downside from this year's stagnation, boding well for nonfarm payrolls. In other news in a truncated week, personal income and spending both rose nicely in October, as did PCE's (see Calculated Risk for a nice trend graph). New and existing home sales declined to their summer levels. This really just shows bottom bouncing since April - certainly not good, but not doom either. Durable goods declined over 3% in October, but only with September's data revised upward to over +5%. In other words, October's durable goods orders were only the second best reading in two years. The upward trend is firmly intact.

As you let your turkey and dressing slowly digest, let's take a look at this week's high frequency data:

As I indicated above,BLS reported 407,000 new claims. The 4 week moving average fell to 436,000. Next week could easily see this average fall under 430,000 (because a reading from 3 weeks ago of 459,000 will be replaced).

Gas at the pump declined one entire penny to $2.88 a gallon. A barrel of Oil increased to $83 this week. While the trend has been upward in the last several months, we have declined from a couple of weeks ago and did not cross the $90 threshold (that we did cross in April). Gasoline usage reamins lower than last year, 8.829 B gallons vs. 9.092 a year ago. Gasoline stocks are back into their normal range for this time of year. Over the longer term, gasoline usage has remained about 5% below its rate from the first half of the past decade.

The Mortgage Bankers' Association reported that its seasonally adjusted Purchase Index increased 14.4% last week, rising to a new post-April high, and only 7.4% less than a year ago. Meanwhile, the Refinance Index decreased 1.0%, the lowest since June, due to increased mortgage rates (to which this index is, not surrisingly, very sensitive).

The ICSC reported same store sales for the week ending November 20 decreased -0.6% week over week, but were up 2.8% YoY, down from +3.4% the last two weeks. Shoppertrak once again failed to report this week.

Railfax for the third week in a row showed a decline in the advance over last year's loads for all sectors, although this week's decline was mild.

The American Staffing Association reported for the week ending November 13 a very slightly decline of 0.04%, remaining at 100.0. This is typical for this time of year. In the next few weeks this index will decline substantially, but the question will be how far in comparison with last year.

M1 and M2 were not updated this week due to the holiday.

Weekly BAA commercial bond rates increased 0.08% last week to 6.03%. This compares with yields on 10 year bonds up +0.21%. This does not indicate any stress on corporate bonds.

The Daily Treasury Statement showed $112.1 B in receipts vs. $103.1 B a year ago, a gain of 8.95% for the first 16 days of November. For the last 20 days, receipts are up $130.1 B vs. $120.2 B a year ago, a gain of about 8.2%. Since the absolute recession bottom in withholding taxes was no later than October 2009, this month marks the first YoY advance over an advancing underlying real number.

With the exception of Railfax, which is probably showing the same industrial pause we saw with durable goods this week and industrial production last week - an inventory correction telegraphed by the ISM data in the LEI over the summer and early autumn - the rest of the high frequency data is showing continued economic advance.

In the coming week we get our first look at November, including payrolls. Will the good news in initial jobless claims show up there? We'll see.

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