Initial Claims, NY Mfr’g, IP

Initial Claims encouraging

Encouragingly, Initial Jobless Claims totaled 366k, well below expectations of 390k, down from 385k last week (revised up by 4) and the lowest since May ’08. The 4 week avg fell to 388k from 394k. Continuing Claims rose by 4k but were below estimates. Extended Benefits did rise by a sharp 332k but that is delayed by two weeks. Bottom line, this level of claims is a definite positive and the Labor Dept said there were no distortions to account for the fall. There is of course a bridge between a slowdown in the pace of firings and a sustainable, large pick up in hiring’s (especially in light of the global economic concerns) but this slowing in the pace of claims filings is good to see.

NY Mfr’g
The Dec NY mfr’g survey, the 1st Dec industrial # out, rose to 9.5 from .6 and was better than the est of 3.0. The components though were mixed as New Orders rose to 5.1 from -2.1 but Backlogs fell to -15.1 from -7.3 (now negative for 6 straight months). Inventories remained negative also for 6 months in a row but less so at -3.5 vs -12.2 in Nov. Employment rose to 2.3 from -3.7 but the Avg Workweek fell to -2.3 from +2.4. Prices Paid rose by 6 pts to a 3 month high but Prices Received fell 2. 5 pts to the lowest since Aug. Optimism about the future was apparent as the 6 month General Business Conditions outlook rose to 52.3 from 39, the highest since May. Bottom line, the best mfr’g reading since May in the face of growing economic clouds is worth noting but no conclusions can be reached until we see what the rest of the country is doing. Philly Fed at 10am will give us some more color.

More data
Nov IP unexpectedly fell by .2% vs a forecasted gain of .1%, in part due to a 3.4% drop in motor vehicle/parts production, the 1st fall since May. Also impacting production was a decline in computer/electronics and natural gas utility output likely due to weather. Production rose a touch in machinery and mining. Also of note this morning, according to the Oct TIC data, China’s holdings of US Treasuries fell to the lowest since July ’10 after selling $14.4b worth. They now hold $1.134T worth. Overall, foreigners bought just $7.6b of US Treasuries in Oct, down from a huge $84.4b in Sept. They bought Gov’t agency bonds but sold corporate bonds and were net buyers of US stocks.

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