Initial Jobless Claims totaled 452k, 3k less than expected BUT last week was revised up by 13k to 475k. The 4 week average fell to 458k from 463k but the level is still too high and reflects continued sluggishness in the labor market and hesitancy on the part of businesses to hire. Yesterday’s Beige Book said “hiring remained limited.” Continuing Claims were 21k higher than expected and Extended Benefits rose a net 278k after the week’s prior fall of 339k. The last extension of unemployment benefits that was signed in July expires in a month and thus puts pressure on the economy to start creating jobs on a greater scale sooner rather than later.
Another stream of good corporate earnings not just in the US but also in Europe are helping to buoy markets. After seeing this combined with the Fed’s Beige Book which reflects a subdued but still modestly growing US economy in addition to a persistent rise in commodity prices and I just have to scratch my head why the FOMC is intent on expanding their balance sheet by up to another 50%. The other money printing country, the UK, at least has a government that is serious about cutting spending but the pound is falling to near a 7 month low vs the Euro as the BoE will be leaned on for more QE. The Euro Zone manufacturing and services composite index fell to the lowest since Oct ’09 but the manufacturing component unexpectedly rose and didn’t show any ill effect from the rally in the Euro. Brazil’s unemployment rate fell to 6.2%, the lowest since at least ’01 and is down from 13.1% in Aug ’03 and 9% in Mar ’09.
Chinese Q3 GDP y/o/y rose 9.6%, a .1% above expectations. Inflation as measured by the CPI rose 3.6%, in line with forecasts and confirms why the PBOC raised interest rates. Retail Sales were above estimates but IP fell short. An aside, following yesterday’s II data where bulls exceeded bears by 23 pts, the AAII measure of individual sentiment saw Bulls rising to 49.6 from 47.1 and Bears falling to 25.2 from 26.8, both near levels last seen in ’09.