- by New Deal democrat
This morning Initial Jobless claims were reported at 496,000, the highest in nearly 3 months. The 4 week moving average increased to 473,750.
Up until now, the jobless claims data had not broken the downward trendline since March 2009. They have now done so. Add this to the surprise strong drop in the Conference Board's consumer confidence number (not confirmed at this point by the similar, older U of Michigan survey), and you have a worrying setback on the jobs and consumer front.
On the other hand, durable goods orders were reported up 3% this month, and last month's report was revised up to +1.9%. While ex-transportation there was a -0.6% decline, last month's data ex-transportation was also revised up to +2.0%. Nondefense capital goods were up 4.7%. This completely turned around YoY Capital goods readings to a positive reading over 10%!
Besides the durable goods data, all of the regional Fed reports - New York, Philadelphia, and Chicago - have also come in strong. Industrial production came in good. The American Trucking Association's report for January showed a very strong increase -- to the point where trucking is back about 2/3 of the way from its recession bottom to its pre-recession top. All of these show a very strong manufacturing rebound that is continuing.
Bonddad and I have both suggested that exports and manufacturing may lead the way in this recovery, and both of us have noted that the US consumer, formerly the locomotive of the world economy, is now the caboose.
We are seeing - at least in one month's data - an amplification of that bifurcated pattern. The economy ex-people is having a V-shaped recovery, while the consumer - especially those in the bottom half of the income distribution - may not be seeing any improvement at all.