CPI and Jobless Claims

We've got a few major indicators coming out today. Right now we have CPI and First Time Jobless Claims, and then we'll be getting the Philadelphia Fed Survey at 10 AM.

CPI for December was ever so mildly disappointing. For the month it was up 0.5% (missing expectations by 10 bps), and core CPI was up 0.1% (missing expectations by 10 bps as well). The analysts - or, at least, the analysts surveyed by Econoday - are feeling optimistic about January. They're looking for growth in CPI to slow to only 0.3%, and for growth in core CPI to remain steady at 0.1%.

Turning to first time jobless claims, we had pretty good results for the week ending 2/5. Analysts were looking for 412,000 new claims and we actually came in at 383,000 claims. Even looking at the unadjusted numbers for first time claims (438,548), and at the insured unemployment level (3,888,000 seasonally adjusted, 4,579,513 unadjusted), things were pretty good. For the week ending 2/12 the Econoday-surveyed analysts aren't as optimistic. They're anticipating an upswing in seasonally-adjusted claims, rising to 410,000.

Are they right? Let's have a look.

As always, we turn to the US Bureau of Labor Statistics for Consumer Price Index data. The report shows the CPI-U (the Consumer Price Index for All Urban Consumers, aka the CPI everyone talks about) rising a seasonally-adjusted 0.4% in January. Stripping away food and energy, and just looking at the core CPI-U, we're still up 0.2%. So both missed expectations. Not by a huge amount in absolute numbers (10 bps in both cases), but enough that the Street might not be happy. A few other interesting points:

• Energy was up 2.1% in January, less than December but still pretty noticeable. Most of that was driven by fuel oil, which was up 6.8% on the month.
• On the other hand, energy services prices as a whole were down 0.6%. Just speculating, it may be that people are trying to conserve more because of increased energy costs. But the report doesn't really say one way or the other.
• Clothing costs were up 1.0%.

First time jobless claims data comes from the US Department of Labor. Their press release tells us first that 2/5's initial jobless claims were revised upwards to 385,000, an increase of 2000. Not great - it really isn't good any time this number goes up - but that's a drop in the bucket sort of increase. For 2/12, the advance seasonally adjusted claims are 410,000. That's right in line with expectations, so that's not bad at all. The insured unemployment rate remained level at 3.1%, with the seasonally adjusted insured unemployment level rising from last week's revised 3,910,000[1] to a new level of 3,911,000.

Looking at the unadjusted numbers, first time claims came in at 421,713, while the insured unemployment level came in at 4,544,310. That looks pretty good, although we'll need to see the Employment Situation report (due out later this month) before we can tell if that decline is from people getting back to work, or if it is due to people running out of benefits.[2]

So there you go. I'll be back at ten with the Philadelphia Fed Survey.

[1] Yes. That was revised upwards as well.

[2] Here's hoping it's due to people getting back to work.