Economy
Weekly Jobless Claims Better, but Durable Goods and GDP Major Disappointment
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This Thursday brought a slew of data on the economic front. We had durable goods, weekly jobless claims, and there was even a Q2 final revision for gross domestic product.
The final revision for Q2 GDP was an unusual surprise as it was revised down to +1.3% from +1.7%. It is rare to see that much of a change on the final revision. This was also worse than every single revision expected from economists.
The big disappointment of the day was the massive drop in August durable goods. The headline number looks like a recession because it came in at -13.2% in August after a +3.3% revised figure for July. The Dow Jones consensus estimate was “only” -5.6. On an ex-transportation figure this was only -1.6% but on an ex-defense basis the August reading was -12.4%. This was the worst overall drop since January of 2009 around the peak of the market panic. The biggest blame here is civilian aircraft, and the report is said to be a lull as Boeing Co. (NYSE: BA) saw a drop in orders from 265 to 1. Still, motor vehicle and parts orders were down by 10.9%.
The one bright spot was the Labor Departments report on weekly jobless claims. This fell by 26,00 to 359,000 for the week. Dow Jones was calling for a reading of 375,000 and Bloomberg was calling for 376,000, and this was the lowest reading since July. It is worth noting that the prior week was revised higher to 385,000 from 382,000.
JON C. OGG
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