Finally... Some (Real) Good News From The Labor Department on Claims & Inflation

The U.S. Labor Department is full of good news this morning.  Both the weekly jobless claims and the producer price index as a measure of wholesale inflation came in better than expected.  Maybe Christmas came early, and maybe the U.S. markets can finally have one morning where U.S. news dominates over the news from Europe.

The weekly jobless Claims report showed a drop of 19,000 to 366,000 for the last week.  The prior week’s figure was revised from 381,000 to 385,000.  Bloomberg had a consensus expectation of 390,000 and the 366,000 was far better than the lowest expectation of 383,000 in Bloomberg’s economist surveys.  Oddly enough, the continuing claims (which has a one-week lag) actually increased by 4,000 to 3,603,000 for the prior week.

The report on producer prices, PPI, came in with a headline figure of +0.3%.  If you strip out food and energy for the Core-PPI the reading was only +0.1%.  Dow Jones had consensus targets of +0.2% on the headline and +0.1% on the core reading.  The year over year figures still sound brutal with the headline PPI at +5.7% and a core PPI of +2.9%.

We usually have a standard line for each jobless report: This report is still not enough to help the true employment picture.  The good news, even if this is still not enough for historical help, is that it is closer than it has been in quite some time to truly being good news. Even the four-week average has now been under the 400,000 mark for 5 weeks.

JON C. OGG