Friday, December 31, 2010

Weekly Indicators: Happy New Year! Edition

- by New Deal democrat

The final week of 2010 ended with some long-in-coming good news, as Initial Jobless Claims dropped below 400,000 for the first time since before the 2008 crash. The 4 week average fell to 414,000.

In other news, the Chicago PMI was also a complete upside blowout, rising to the highest reading in over 20 years! Consumer confidence declined slightly. House prices continued to decline. On balance, I believe this is a good thing, as it makes housing more affordable (but I support bankruptcy cramdown legislation for existing homeowners).

Besides initial jobless claims, here is this week's other high frequency data:

Gas at the pump sold at $3.05 a gallon last week, and Oil remained above the $90 a barrel mark for most of the week, but closed at about $89.50. Despite this, gasoline usage was once again significantly above last year's levels - about 3%,

The Mortgage Bankers' Association did not report this week. It's reports will resume next Wednesday.

The ICSC also ended 2010 with a bang, reporting same store sales for the week ending December 25 increased 4.8% YoY - the best YoY comparison all year - and increased 1.0% week over week. Shoppertrak went the other way, reporting that sales fell 4.1% YoY in the week ending December 26. Shoppertrak blamed the poor week in part on the east coast snowstorm.

Railfax declined in all areas last week, for seasonal reasons. It remained steady in its comparative improvement over last year. Shipments of waste and scrap metal continue to improve, but auto shipments are significantly below last year, although they have now stabilized.

The American Staffing Association Index fell one point to 100 for the week ending December 18. This index will decline further, and significantly next week for seasonal reasons, and won't give much reliable information again until January.

M1 and M2 were not reported in time for me to include them in this post. I'll update over the weekend at some point when I have a chance.

Weekly BAA commercial bond rates fell back to 6.10% last week from 6.18%. This was in line with a decline in yields of the 10 year Treasury bond. All bonds have come under stress recently, but this suggests investors are "reaching for yield." There appears to be no fear of a deflationary pulse.

The Daily Treasury Statement showed receipts in the first 21 reporting days of December of $153.8 B vs. $145.1 B a year ago, for a gain of 6.0%. With the change in Social Security payroll reporting in 2011, this metric will have to be fudged somewhat to try to at least get a comparative handle on the data.

This week's data confirms that the story at the end of 2010 is that the economy seems to be gaining momentum. Once again that suggests that Oil and other commodity prices, and mortgage rates, are likely to be a "choke collar" on that growth.

In the meantime, I owe you a 2010 report card and a look ahead at 2011, which I'll try to do in the next week or so.

Have a happy and safe New Year. We'll see you then!