"Economists are pessimists: they've predicted 8 of the last 3 depressions."
--Barry Asmus

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Thursday, August 11, 2011

First Time Jobless Claims

And of course, we have the first time jobless claims.  What can I say about this that hasn't already been said?
Last week, the analysts were expecting a seasonally-adjusted 403,000 new claims for the week ending 7/30.  We came in at 401,000, which beat expectations right until the almost inevitable moment today in which that figure is revised upwards[1].  Unadjusted initial claims for the same period declined 27,230 to a level of 339,348, and the total number of people claiming benefits in all programs (for the week ending 7/16) came in at 7,570,439.
The Econoday-surveyed analysts are not expecting the week ending 8/6 to be so good.  They are calling for 405,000 new claims for the week.  Are they right?  Well, history seems to show that they aren't, but let's look and find out anyway.
Right off the bat, the Unemployment Insurance Weekly Claims Report shows my continuing skepticism about the advance figures is justified.  But only slightly, this week.  The new claims for the week ending 7/30 were revised upwards to a level of 402,000[2].  And now, here's where the interesting data happens:  for the week ending 8/6, the advance figure for seasonally adjusted initial claims comes in at 395,000 - substantially beating expectations.  On the down side, the unadjusted initial claims figures for the same week rose 12,022 to a level of 351,370.  The total number of people claiming benefits in all programs fell 90,524 to a level of 7,479,915[3].
So, we had a dose of good news for the markets that are feeling spooked by current economic conditions.  Will it be enough to turn things around?  No, probably not.  Not on its own, anyway.
[1]  We're sitting at 19 upwards revisions out of 23 weeks, so we have an 82.61% chance of an upwards revision.
[2]  So yes, that does put us at 20 upwards revisions out of 24 weeks.  But it seems almost petty to lament an upwards revision of 2000.
[3]  A fact that is not, as I have remarked before, necessarily good news.

International Trade

The International Trade Balance - aka the US International Trade in Goods and Services report - is a look at the nation's trade deficit.  Or, theoretically, our trade surplus.  It's a pretty hefty report as economic indicators go, because it's added to the sum of consumer spending plus private investing plus government spending to determine what our GDP is.  And since we've been running a trade deficit for decades now, meaning nobody seriously expects to see a surplus when the report comes out, the markets get happy when the trade deficit shrinks.
Last month, there was no happy for the markets.  The analysts had been expecting the trade deficit to decline $1 billion to a level of $42.7 billion.  Unfortunately, the sad reality was that our trade deficit increased $6.5 billion to a level of $50.2 billion, driven by a decrease in industrial supplies and materials exports and an increase in imports of industrial goods and supplies and of capital goods.
But hope springs eternal, and the Econoday-surveyed analysts are expecting June to be a better month.  They're looking for a $2.2 billion decline in the trade deficit, bringing it to a new level of $48 billion.
Turning now to the joint US Census Bureau/US Bureau of Economic Analysis report, we see that hope - far from springing lightly - has been crushed to earth by the iron-shod fist of reality.  The trade deficit did not decline $2.2 billion.  It did not decline at all.  Rather, it increased $2.9 billion to a level of $53.1 billion.
So, yeah.  No happy for the markets on this front this month either.