Initial Jobless Claims (Jan 19)
Back to the lows.
This means Q4 GDP probably won’t be all that weak.
Full employment recessions are extremely rare.
Exporters must have maintained and/or increased output as well, which will show up in the Dec trade numbers not out until Feb, so watch for upward revisions from next week’s initial GDP report.
And look for exports to continue strong as markets adjust to CB’s no longer accumulating $US financial assets at the same pace.
Continuing Claims (Jan 12)
Continuing Claims since 1980
Also moving lower from a small blip up.
It’s all looking more and more like the great repricing of risk and the rearranging of financial assets hasn’t spilled over into the real economy. Yet.
And it also looks like the Fed may have done the ’emergency cut’ in response to Soc Gen evening up positions.
So the score is 175 bp in cuts into a growing economy and a triple negative supply shock that’s so far generated 4%+ year over year inflation and core numbers rising as well.
And demand for Saudi output is up to 9 million bpd, so their position as swing producer and price setter remains secure.
Not to mention the fiscal package that Bernanke has blessed – gives Congress and the President the green light to pump things up for the election.
And don’t forget Federal spending seems to have been moved forward from 2006 to 2007.
Economy should be at full boil by Q2, as we recover from the full employment recession…
And don’t worry about housing anymore. It’s all backwards looking and is a small enough % of GDP to not be a material negative to growth.
But if/when it turns, and I think that is already happening (but we need to wait until after the winter months to get some reliable data) it all starts to overheat again.
Existing Home Sales (Dec)
Existing Home Sales MoM (Dec)
Both muddling through the winter months.
Home Sales Average Price
Existing Homes Inventory
Inventories did drop some, and prices down only modestly year over year.