Posted by: cfigueira | December 2, 2010

Key Economic News

After an early morning reading on on-line advertising, we have claims, pending home sales, and the Fed’s balance sheet.

The Monster index of on-line job advertising fell two points in November, but on a seasonally adjusted basis it was unchanged. On a year-to-year basis, the increase in this measure of on-line advertising remains up about 13%, a smaller gain than in the early summer (up about 20% in June and July). Yesterday, the Conference Board reported a 47,000 (about 1%, month-on-month) increase in its count of on-line advertised vacancies.

Reversing most of last week’s improvement, but trend still down.
Claims reverse most of prior week’s decline, but four-week average continues to fall.

Key Numbers:
Initial claims up 26k to 4236k in week ended Nov 27 vs.. median forecast 424k.
Continuing claims up 53k to 4.27 million in week ended Nov 20 vs.. median forecast 4.2 million.

Main Points:
1. Initial claims rose 26,000 in the week of Thanksgiving. Coupled with a 3,000 upward revision to the prior week, this amounts to a reversal of more than 80% of the prior week’s decline. Still, the four-week average of claims continues to come down, to 431,000, as this calculation sheds the last observation above 450,000. So the report is consistent with some improvement in the labor market while also suggesting that the tantalizing drop reported a week ago reflected the difficulty of nailing down seasonal patterns on a weekly basis. As we move into the holiday season, it will be important to focus on the trends over several weeks.

2. Continuing claims likewise took back a significant part-in this case just over half-of the 107,000 decline reported for the preceding week. The number of individuals receiving extended/emergency benefits rose by about 235,000, reversing most (about 90%) of the prior week’s 262,000 decline.

10:00: Pending home sales index for Oct…another decline? This index lost ground in September following the recovery from its post tax credit slump. Estimates are biased toward another decline in October.
Median forecast (of 40): -1%, ranging from -4.8% to +3.0%; last -1.8%.

16:30: Federal Reserve balance sheet…Last week’s report showed the first effects of the large-scale asset purchases (LSAPs). Expect more of the same for the next seven months.

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