Positively, Initial Jobless Claims fell to 359k from 385k last week. It was well below expectations of 375k and the lowest since early July. It brings the 4 week average down to 374k from 379k and while the Labor Dept said the data included “very minor activity” related to the aftermath of hurricane Issac, it had almost no impact on the national figure. Continuing Claims fell by 4k and Extended Benefits were lower by 2k. Bottom line, while one week doesn’t make a trend, the pace of firings took somewhat of a break on the week. This says nothing however about any pick up in hiring at least for now with business visibility still cloudy.
Negatively, Durable Goods orders in Aug fell a sharp 13.2%, well below estimates of a drop of 5% as volatile nondefense aircraft orders basically fell to zero. Ex transports, orders were down 1.6% instead of an expected gain of .2%. Non defense capital goods ex aircraft orders however were up by 1.1% BUT July was revised to a decline of 5.2% from a drop of 3.4%. Shipments, which get directly plugged into GDP, fell 3% after a 1.9% gain in July. And, because of a .6% gain in inventories, the inventory to shipments ratio rose to 1.67 from 1.61, the most since Nov ’11. Bottom line, putting aside the huge drop in aircraft orders and 10.9% drop in vehicles/parts orders after a 12.1% rise in July, core cap ex while up in Aug is only barely off its lowest level since Feb ’11.