Posted by: cfigueira | November 10, 2010

Mortgage Industry News

Better trade, Better claims, Higher import prices
Initial claims reverse the previous week’s increase while continuing claims trend lower and claims for extended benefits fall. Four-week average of initial claims now at lowest level since the week before the Lehman filing. Trade balance improves, adding to other (inventory) indications of a modest upward revision to third-quarter growth. Import prices surge, reflecting higher crude oil and food prices.

Key Numbers:
Initial claims fall by 24k to 435k in the week ended Nov 6 vs.. median forecast 450k.
Continuing claims -86k to 4.301 million in week ended Oct 30 vs.. median forecast 4.305 million.
Trade balance -$44bn in Sept vs.. median forecast -$45bn.
Import prices +0.9% in Oct (mom, +3.6% yoyo) vs.. median forecast +1.2%.

Main Points:
1.
Initial claims fall by 24k to 435k in the week ended Nov 6 and thus revert back to their level two weeks before. The four-week average of initial claims is now at its lowest level since September 13, 2008, an interesting symbolic benchmark as this was the week prior to the Lehman bankruptcy filing. Continuing claims declined by 86k to 4.3 million in the week ended Oct 30, but from a level that was revised up by 47k. Extended benefits-which are not seasonally adjusted-fall by almost 300k in the week ended Oct 23.
2. The US trade deficit narrowed in September, adding to other information suggesting that third-quarter growth was firmer than originally reported. In it preliminary estimate of that growth, the Commerce Department had assumed essentially no change in the balance on goods. The improvement came largely from 1% drop I imports; exports rose 0.3% on the month. By itself, this report would add about 1/4 point to the third-quarter growth rate, pushing our guesstimate of this revision close to 2 1/2% (vs.. a preliminary figure of 2.0%) with data on retail sales and inventories yet to come.
3. Rising crude oil prices accounted for most of the 0.9% increase in US import prices reported for October. However, prices of other imports also rose 0.4% on the month, largely in foods and beverages, as the weakening dollar appears to have filtered into prices of these inbound goods as well.

14:00: The US budget balance for Oct…off to a running start. The CBO estimates that the US Treasury started the new fiscal year with a $140bn deficit. The apparent improvement from October 2009 is due to a calendar-related shift in outlays.
Median forecast (of 35): -$140bn, ranging from -$130bn to -$164.9bn; last (Oct 2009): -$176.4bn.

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