Jobs & Durables So Bad, A Possible Inflection Point?

If you were hoping for any remotely positive economic data this morning, the news is not just a disappointment.  It is really awful.

The data on weekly jobless claims is above recently normal levels.  And durable goods orders are softening at a rate that would make even the most bullish pundits cringe.

The weekly jobless claims data went from bad to really bad to just awful.  This last week’s jobless data was 677,000.  This is a gain of 36,000 and way over the consensus estimates of 625,000.  This was worse than estimates from economists polled by  Bloomberg.  That gain reflects an upward adjustment as the prior report was “only” 627,000 and the revised level is 631,000.  The four-week average rose another 19,000 to 639,000.  But here is the largest number on record: the continuing jobless claims rose a sharp 114,000 to 5,112,000.  Yep… over 5 MILLION…..

The reading for January durable goods is another kick in the you know where.  The headline number was -5.2%, about twice as bad as estimates from economists.  The ex-transportation figure was-2.5%, which is roughly in-line with estimates.  But the December durable goods was revised far lower.  The prior reading of -2.6% has now been revised to -4.6% on the headline durables, and revised from -3.6% to -5.5% on ex-transportation.

The hope is that the market can start to stabilize once we start to see a decline in the rate of decline.  Unfortunately, the data continues to fall.  About all we can hope for is that these economic numbers are getting so bad that this could be viewed by some as something similar to an inflection point.  Otherwise it feels like the weatherman has given the forecast…. Pain today and for the foreseeable future.

Jon C. Ogg
February 26, 2009