Productivity And Costs And First Time Jobless Claims

This is looking to be a morning full of economic measures. Coming out at 8:30 AM EST we have the big boys on the Street, First Time Jobless Claims and Productivity and Costs. Then, at 10 AM EST, we have the ISM Non-Manufacturing Index and Factory Orders.

As far as First-Time Jobless Claims are concerned, we had a miserable week last week. Initial jobless claims hit a seasonally adjusted 454,000 for the week ending 1/22. For the week ending 1/29, there does seem to be a little optimism (possibly driven, in part at least, by yesterday's pretty good jobs reports from ADP and Challenger), and we're looking at a consensus expectation of 425,000.

So, was the optimism of the analysts justified? According to the US Department of Labor, their only failing was that they were not optimistic enough. On the down side, the initial jobless claims figures were revised upwards to 457,000 (not so good). But then, the seasonally adjusted initial claims for the week ending 1/29 came in at 415,000 - beating expectations by 10,000. Meanwhile, the seasonally adjusted insured unemployment level fell to 3,925,000 - a nice decline from the previous week's revised level of 4,009,000.

The unadjusted figures are 459,683 new jobless claims (still down 26,633 from last week) and an insured unemployment level that increased 5,274 to a level of 4,619,319. 25 states saw first-time claims fall by more than 1000, and only 4 states saw claims increase by more than 1000.

In a word: not bad[1]. The markets should be happy about this.

Then, looking at Productivity and Costs, Q3 2010 saw a 2.3% increase in nonfarm productivity, and a 0.1% decrease in unit labor costs. For Q4 2010 the analysts are expecting the exact same thing - a 2.3% increase in nonfarm productivity and a 0.1% decrease in unit labor costs.

Much as was the case with First-Time Jobless Claims, the Bureau of Labor Statistics is telling us that the analysts weren't optimistic enough. Nonfarm labor productivity increased 2.6% in Q4 2010, driven by a 4.5% increase in output and a 1.8% increase in hours worked. meanwhile, unit labor costs decreased by 0.6%, driven by the fact that the increase in productivity (up 2.6% as we just saw) outpaced the increase in average hourly compensation over the same time (up 1.9%).

So we're off to a good start. Now, if the Middle East can keep from descending into anarchy and bloodshed, maybe the markets will be up today.

[1] Yeah, I know. "Not bad" is two words. Here's another word: "so what'?

Durable Goods Orders! Jobless Claims!

We've got two major sets of data points out now, so let's see if there will be more joy in the US than in Japan this morning.

First off, Durable Goods Orders. We're about to look at the December 2010 figures, and analysts are looking for substantial improvement. November saw a revised decline of 0.1% in orders, or a revised increase of 4.5% in ex-transportation orders. For December, the analysts are burning incense to Plutos Catachthonios and hoping for a 1.5% increase in new orders. And does the US Census Bureau disappoint us? Yes. Yes it does. Durable goods orders declined 2.5% for the month (ex-transportation, they were up a tepid 0.5%). The transportation sector was the biggest loser (new orders down 12.8%), with nondefense aircraft the biggest loser in the sector (down 99.5%[1]).

So, what about First Time Jobless Claims? Will that make the markets happy? We did really well last week - even after revising the figures, we had a better than expected seasonally adjusted 403,000 new claims. Unfortunately, there is no joy to be found in the news from the US Department of Labor, either. Seasonally adjusted, the week ending January 22 saw 454,000 initial jobless claims[2]. The seasonally adjusted insured unemployment level[3] is 3,991,000 (up 94,000) as of the week ending January 15, with the insured unemployment rate at 3.2%.

In domestic news, does anyone remember me talking about the Iraqi Dinar? Good. There is related news, with the US Commodity Futures Trading Commission using provisions in the Dodd-Frank Wall Street reform law and the 2008 Farm Bill[4] to file suit against 14 foreign exchange dealers. The suits allege that the firms named illegally solicited members of the public to engage in foreign currency transactions, and that they operated without being registered with the CFTC. The CFTC is looking for civil monetary policies, as well as trading and registration bans. DinarTrade is not one of the companies named.

[1] Not a typo.

[2] Interestingly enough, the unadjusted numbers came in at 482,399 for the week ending January 22. That's down from the week ending January 15, and also down from the 502,710 initial claims for the comparable week in 2010. Go figure.

[3] I haven't really discussed this figure before. The insured unemployment level is the number of persons who are currently receiving state unemployment insurance payments. It is not used in any way as a measure of actual unemployment, because not everyone who is unemployed receives unemployment insurance benefits.

[4] No, I'm not sure what farming has to do with it either.