Friday, December 10, 2010

Weekly Indicators: St. Nick brings lower jobless claims edition

- by New Deal democrat

There was very little in the way of monthly numbers this week. Total consumer credit increased, for the second month in a row, after 2 years of nearly relentless declines. Revolving credit, however, continued to decline. Consumer sentiment improved to the best level in 5 months - including expectations, one of the 10 leading indicators.

But this week's high frequency data included the most noteworthy statistic of all.

The BLS reported 421,000 new jobless claims. The 4 week moving average fell to 427,500, the lowest since early August 2008. Six of the last seven weeks have shown 440,000 or fewer new claims. This week's decline is strong confirmation that we are moving into a lower range. Since mid-August the 4 week average has declined almost like clockwork, a total of over 60,000 in 15 weeks. If this trend continues (no guarantee), the average will drop below 400,000 by February.

Gas at the pump increased ten cents to $2.96 a gallon last week. This is about $0.25 above its average from a few months ago. Oil increased to over $90 a barrel briefly this week. Gasoline usage rose above that of last year, 9.171 B gallons vs. 9.012 B a year ago. Gasoline stocks remain back in their normal range for this time of year.

The EIA appended an interesting note this week, reading in part:
... U.S. total demand over the February through September period is growing at an even stronger pace, slightly over 500,000 barrels per day on average, or about 3 percent.
.... U.S. year-over-year growth of almost 750,000 to over 900,000 barrels per day in August and September is of an order approaching, or even exceeding, growth levels seen in China. When the swing from huge declines last year to large third quarter growth levels observed this year is taken into account, the U.S. contribution to tightening global balances is considerable. Nevertheless, even given strong growth this year, U.S. oil demand remains well below peak levels seen in 2005
The choke-collar applied by Oil prices to growth is a continuing an chronic problem, and bears continued close scrutiny.

The Mortgage Bankers' Association reported that its seasonally adjusted Purchase Index increased 1.8% last week, the third increase in a row, and rose to yet another post-April high. This series is approaching year-ago levels, without benefit of stimulus. This is good news. Contrarily, the Refinance Index declined yet again, another 1.4% from a week ago, the fourth decrease in a row. Rapidly increasing mortgage interest rates are killing refinancing, and this may have an effect on consumer spending later.

The ICSC reported same store sales for the week ending November 27 increased 2.6% YoY, but were down -2.1% week over week. Shoppertrak reported that sales rose 2.3% YoY in the week ending December 4. They stated, "Annually in the week following the strong Black Friday weekend ... , retailers experience a bit of a lull as consumers recover from the three-day spending frenzy and wait for the next big deal throughout the season. Because of this, ShopperTrak is reporting that even a minimal sales increase should be seen as positive."

Railfax showed that baseline traffic, for the second time since summer, is just barely ahead of last year. On the other hand, both intermodal and cyclical loads are well ahead of last year, and increased in the past week, as opposed to decreasing a year ago.This is a change from the last few weeks.

The American Staffing Association reported for the week ending November 27 their index fell from 101 to 97. This is entirely due to Thanksgiving and this type of drop happens for one week every year.

M1 was up 1.5% for the week, up 2.8% vs. last month, and +9% YoY, meaning "real M1" is up 7.8%. M2 was up less than 0.1%for the week, 0.4% vs. last month, and 3.1% YoY, meaning "real M2" is up 1.9%. Real M2 has stalled without being able to break out of the "red zone" below +2.5% YoY.

Weekly BAA commercial bond rates remained flat last week back at 5.95%. This compares with yields on 10 year bond yields going up .09%. This suggests investors are "reaching for yield" and is inconsistent with any stress on corporate bonds.

The Daily Treasury Statement showed receipts in the first 6 reporting days of December of $44.8 B vs. $38.3 B a year ago, for a gain of 19%! For the last 20 days, however, the YoY gain is only 4%, $134.1 B vs. $128.8 B a year ago.

Finally, a special weekly indicator: contrary to the DK Pied Piper of Doom, Bank of America failed to implode this week, it's shares instead rising above their 50 day moving average.

P.S. We have a lot of new readers this week, and we're not exactly sure where you all are coming from. If you just started reading this blog, please leave a comment and let us know how you were pointed here.

Have a nice weekend!