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

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Thursday, November 10, 2011

U.S. Import and Export Price Indexes News Release

Bureau of Labor Statistics
The latest U.S. Import and Export Price Indexes news release has been posted on the BLS website at http://www.bls.gov/news.release/pdf/ximpim.pdf and also archived at http://www.bls.gov/news.release/archives/ximpim_11102011.pdf. Highlights are below.

Import prices dropped 0.6% in October, export prices fell by 2.1%


U.S. import prices declined 0.6 percent in October, after recording no change in September. Decreasing prices for both nonfuel and fuel imports contributed to the October drop. Export prices fell 2.1 percent in October, the largest monthly decline since a 2.2 percent decrease in December 2008.


International Trade

International Trade is one of those justifiably influential reports.  Even if you've never paid attention to it before, you've heard of it.  Of course, if you don't follow the economic indicators, you've probably heard of it under a different name:  the US trade deficit.  And that's exactly what International Trade is:  the difference in total dollars between what we import and what we export.  In theory, it could be a trade surplus as well, but that hasn't been seen since 1975 (when our trade surplus was $12.5 billion).
Why is this influential, though?  Well, it directly impacts gross domestic product, which is the sum of government spending plus private sector spending plus consumer spending plus trade surplus.  So, if we have a shrinking trade deficit, that directly implies a growing GDP.  Of course, if the trade deficit expands, that directly implies a shrinking GDP.  And since GDP is used as a direct measure of the overall health of our economy, that means a growing trade deficit is a bad thing[1].
The August trade deficit was reported at $45.6 billion.  For September, the Econoday-surveyed analysts are expecting to see it grow in size to a level of $46.3 billion, with a range between $44.2 billion and $49.5 billion.
Of course, that's just the analyst expectations.  For the actual figures we turn to the U.S. International Trade In Goods and Services Report, where we learn the following:
  • The August trade deficit was revised to only $44.9 billion, which is a good thing (it got smaller).
  • The September trade deficit (technically the goods and services deficit) is calculated at $43.1 billion, which handily beats expectations.
That would seem to be a positive trend, if you can rationally call two months of data a trend.  Let's hope we see this continue in the coming months.
[1]  There are probably economists out there with elegant mathematical theories that would be willing to argue that it actually isn't a bad thing.

First Time Jobless Claims

Well, it's Thursday.  And if it's Thursday, that means it's time for the First Time Jobless Claims report!
To start with, let's recap last week.  The advance figure for initial claims for the week ending 10/29 came in at 397,000 (which beat the expected 400,000 new claims), and the advance figure for actual initial claims came in at 366,923.  Meanwhile, the total number of people claiming benefits in all programs (for the week ending 10/15) came in at 6,781,690.
So that was the past.  And while we wait with baited breath for the release of the report, let's see what the Econoday-surveyed analysts are forecasting.  Their consensus estimate is the same as last week:  400,000 new claims, with a range of anywhere from 394,000 to 410,000.
Of course, for the actual results, we turn to the US Department of Labor and their Unemployment Insurance Weekly Claims Report.  A review of that report reveals the following details:
  • The seasonally adjusted initial claims for the week ending 10/29 have been adjusted upwards to 400,000, meaning that last week no longer beat expectations.
  • The advance seasonally adjusted initial claims for the week ending 11/5 are being reported at 390,000, which beats expectations handily until they are (most likely) revised upwards next week.
  • The actual number of initial claims for the week ending 11/5 is being reported at 398,753.
  • The total number of people claiming benefits in all programs for the week ending 10/22 is reported at 6,835,604.
So, the markets will probably take this as a good sign.  And then they'll wait to see if Greece explodes.