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Wednesday, January 19, 2011

British Unemployment, Manufacturing For Loonies, And US Housing

First, we look overseas.  Great Britain released its Labour Market Report at 4:30 AM EST today, and it was relatively good.  November saw claimant count unemployment[1] drop a revised 3200 to a level of 4.5%.  For December, claimant count unemployment declined 4100 (beating expectations by 4100), but the claimant count unemployment rate remained unchanged.  (By comparison, the ILO Unemployment Rate[2] remained unchanged at 7.9%).  Average earnings for the year also declined 10 bps to 2.1%, missing expectations by 10 bps.

Canada has released it's Manufacturing Sales figures for November, which looks at the dollar[4] level of manufactured durable and nondurable goods shipments.  October saw a 1.7% increase, and the analysts were looking for things to slow down to only a 0.5% increase for November.  Unfortunately, while they were right to expect things to slow down, they were way off in how much.  Shipments declined to a -0.8% decrease.  November was a bad month for Canadian factories, apparently.

But, when you get right down to it, this is being written in the United States.  And the United States, historically speaking, doesn't really care what happens outside its borders unless it has a direct and visible impact on us[5].  So let's see what's happening domestically:

The Mortgage Bankers' Association's weekly Purchase Applications Report is out.  Last week the purchase index (tracking the number of new mortgages) was down 3.7%, the refinance index was up 4.9%, and the composite index was up 2.2%.  For the week ending 1/14 the purchase index was down again, but only 1.9%, while the refinance index was up 7.7% and the composite index was up 5.0%.  Things may be looking up for the new and existing home sales indexes.

Speaking of which, the other thing we're looking at today are Housing Starts for December.  Last month saw 555,000 new starts, and the Street is looking for that to taper off a little with only 550,000 new homes starting construction.  New construction permits hit came in at a revised 544,000.  The actual results are mixed.  Actual housing starts came in at a seasonally-adjusted 529k (missing expectations), but a seasonally-adjusted 635k permits were issued.  Also, a seasonally-adjusted 585k homes were completed, up from November's revised 553k.  So, the Street will be unhappy at the comparatively small number of new homes that started, but there's a whole bunch more new ones on the horizon to get everyone revved up again.

[1]  Say what now?  Claimant count unemployment, according to wikinvest, is the number of people claiming unemployment benefits.  The claimant count unemployment rate is then the claimant count unemployment level divided by the total number of available full and part-time jobs in the UK.
[2]  Again, say what now?  The ILO[3] Unemployment Rate is the percentage of economically active people who are unemployed by ILO standard.  This means people who are out of work but actively looking for a job, or who are out of work and are waiting to start a new job in the next two weeks.
[3]  Yes, I've footnoted a footnote.  The ILO is the International Labour Organization.
[4]  As measured in "loonies".  You've got to love a nation that puts a duck on it's currency.
{5]  Or our foreign policy objectives.  Or if the other nation has stuff we want.  Or if the other nation happens to be Communists.

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