Initial Jobless Claims totaled 470k, 20k above expectations but down from 478k last week (and 444k the week before) where the Labor Dept attributed the spike to administrative backlogs in processing claims. There was unfortunately not more of a drop this week which is clean of distortions and bears watching. Smoothing out the recent data has the 4 week average at 456k, a 4 week high. Continuing Claims, capturing up to 26 weeks of claims and whose data is delayed by 1 week, fell by 57k but were a touch above expectations. Extended benefits past this, whose data is delayed by 2 weeks, fell by 305k but comes after a spike of 613k in the prior week so its likely best to average the 2 weeks in order to get a better gauge of those collecting benefits past 26 weeks and up to 99 weeks in some states. Bottom line, the labor market data in terms of hiring is still very cloudy and the pace of firings has stopped getting better.
Dec Durable Goods rose .3%, below estimates of 2% but ex transports saw a gain of .9%, .4% above forecasts. Non defense capital goods ex aircraft rose 1.3% and is now up 3 of 4 months. Orders for vehicles and parts rose 3.6% and are up for 7 straight months and is a key part of the inventory boost to GDP. Orders of computers/electronics fell by 3% and electrical equipment was down 3.9%. Machinery orders and primary metals both were up strongly. Shipments, which get directly plugged into GDP, rose 2.9% and is up for a 4th straight month with Dec being the strongest of them and its contribution will be seen in tomorrow’s Q4 GDP report. Inventories overall remained lean however as the inventory to shipments ratio fell to 1.66 from 1.72, the lowest since Sept ’08. Bottom line, headline orders have been very lumpy, rising one month, falling another but the inventory story may have more legs with end demand still an open question.