Economic data

Initial Jobless Claims totaled 452k, 18k below expectations and down from 480k last week. It’s the lowest reading since mid Sept and continues to lend evidence to the story of a slower rate of firings that we’ve seen with the question of how quickly it turns into job gains still being open. Continuing Claims were well below forecasts at 5.076mm, almost 100k less than estimated and down from 5.203mm last week but the data past 26 weeks was more mixed. Emergency Unemployment Compensation rose by 142k but Extended Benefits past this fell by 145k. The data doesn’t tell us though whether that was due to the exhaustion of benefits where people may reapply due to the recently enacted extension of benefits or due to people finding new jobs. Either way, the slowing pace of firings will inevitably lead to a rise in hirings if the economy continues to heal.

Nov Durable Goods rose .2% headline which was .3% light but exceeded expectations ex transports where it rose 2%, .9% above forecasts. Oct was also revised up. Non Defense Capital Goods ex Aircraft rose 2.9%, bouncing from the Oct decline of 2% and the gain was in a variety of sectors such as computers/electronics, electrical equipment, machinery, fabricated and primary metals. New orders in vehicles and parts fell .2% but follows 4 months of solid gains as inventories have gotten filled again. Shipments, which get directly plugged into GDP, rose .3%. Inventories fell .2% and haven’t risen since Dec ’08 but the inventory to shipments ratio remained unchanged at 1.73. Bottom line, the data ex transports was good but has been lumpy over the past year as we’ve seen over the past 5 months in particular a down month followed by an up month so sustainability still remains an open question in the pace of capital spending.

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