Economic data

The amount of people filing for Initial Jobless Claims continues to fall, totaling 348k vs 361k last week (revised up by 3k) and 17k less than expected. It’s at the lowest level since Mar ’08 and the 4 week average is down to 365k from 367k. Continuing Claims fell by 100k to the lowest since Aug ’08 and Extended Benefits fell a net 13k. Bottom line, the labor market continues to improve as the pace of firings recede again. Jan Housing Starts totaled 699k, 24k above estimates and up 10k from Dec. The gain was led again by the multi family sector as starts there rose by 15k, offsetting a 5k start decline for single family. Permits for both were little changed. Jan PPI rose just .1% headline vs the forecast of .4% but was up .4% core, twice expectations. Headline PPI is now up 4.1% y/o/y and 3% ex f&f. The headline figure was kept in check by a decline in both food and energy prices m/o/m. The core rate y/o/y though matches the highest since June ’09. Inflation in the pipeline was mixed as intermediate goods prices fell m/o/m while wholesale prices at the crude stage of production were higher m/o/m. In terms of the market focus on inflation, tomorrow’s CPI will be more important but it’s clear from today’s data that inflation remains sticky.

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