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Karim writes:

  • Initial claims jump 16k to 445k (4wk avg 439k from 444k)
  • Continuing claims rise 15k to 3435k (4wk avg 3400k from 3367k)
  • A correction from the impact of the extended benefits program would have seen initial claims drop to the 400-425k range (as was expected)
  • This increase and a new cycle high in continuing claims suggests some renewed labor market weakness and adds to downside risks to upcoming NFP reports
  • Unit labor costs for Q2 revised from unch to -0.5% and productivity from 3.5% to 4.3%. These numbers are volatile, but at the margin, the Fed will welcome these revisions as they relate to its inflation outlook.

Yes, and they also show that a share of the job losses were attributable to ‘efficiency gains’ rather than macro weakness (though the two are related) meaning economic potential is firming. This is the ‘classic benefit’ of a slowdown.

  • ISM Non-Mfg headline continues to meander around 50 (rises from 49.5 to 50.6)
  • Prices paid drops from 80.8 to 72.9; employment weakens further, from 47.1 to 45.4
  • Orders up 2 points, export orders down 3pts
  • Labor department official states claims data this week were a ‘clean read’, but that next week’s number will be effected by the Gustav evacuation
  • Trichet says Euro economy in an ‘episode of weak activity’ and that M3 data is overstating monetary expansion as credit growth is moderating. States ECB especially focused on wage growth, but when asked if he agrees with Board member Stark on seeing ‘broad-based’ second round effects, says only seeing ‘some second round effects’. Seems like ECB wants to see weak growth become entrenched and wage demands to moderate before entertaining rate cuts-i.e., unemployment needs to rise further.

US Economic Releases

ADP Employment Change (Aug)

Survey -30K
Actual -33K
Prior 9K
Revised 1K

Continuing its long, lazy trend lower, but not recession levels yet.


ADP Employment Change MoM (Aug)

Survey n/a
Actual 0.0%
Prior 0.0%
Revised n/a










Nonfarm Productivity QoQ (2Q F)

Survey 3.5%
Actual 4.3%
Prior 2.2%
Revised n/a

Very high number. Shows the higher GDP is being sustained by fewer workers.


Unit Labor Costs QoQ (2Q F)

Survey 0.0%
Actual -0.5%
Prior 1.3%
Revised n/a

Nice downtick. Domestic labor costs aren’t pushing up prices yet.


Productivity TABLE 1 (2Q F)


Productivity TABLE 2 (2Q F)


Initial Jobless Claims (Aug 30)

Survey 420K
Actual 444K
Prior 425K
Revised 429K

Keeps working its way higher after the extended benefit program was initiated, though the 4 week average is a touch lower.


Continuing Jobless Claims (Aug 29)

Survey 3423K
Actual 3435K
Prior 3423K
Revised 3429K

Not looking good and also not sure how much this is influenced by the extended benefits program.


Jobless Claims ALLX (Aug 30)


ISM Non-Manufacturing Composite (Aug)

Survey 49.5
Actual 50.6
Prior 49.5
Revised n/a

Better than expected.



Employment and export orders down some, while prices paid still very high.


ICSC Chain Store Sales YoY (Aug)

Survey n/a
Actual 1.7%
Prior 2.6%
Revised 2.5%

Not great, but not falling apart.




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