Flurry of Data Shows Major Economic Weakness
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Today the market was inundated with a flurry of negative economic data, which showed that major cracks are developing in the real economy. Data showed job losses are mounting, U.S. consumers are pulling back in a major way, new home sales were worse than dire projections and consumer confidence is waning.
Data today on the employment front showed that initial jobless claims last week were 529,000, with continuing claims at 3.96 million. First-time claim for unemployment benefits declined 14,000 for the week but the four-week moving average for initial claims is now 518,000, the largest since January 1983.
Personal spending dropped 1% in October, the most since 2001. October's slide followed a 0.3% drop in September.
Durable Goods Orders fell 6.2% in October, well above the 3% drop economists had anticipated. This was the largest percent decrease in new orders since October 2006 and followed two consecutive monthly decreases including a 0.2 percent September decrease. Excluding transportation, new orders decreased 4.4 percent. Excluding defense, new orders decreased 4.6 percent. Inventories of manufactured durable goods in October, up fifteen of the last sixteen months, increased $1.4 billion or 0.4 percent to $341.1 billion. This was at the highest level since the series was first stated on a NAICS basis in 1992 and followed a 0.2 percent September increase.
Sales of new one-family houses in October 2008 were at a seasonally adjusted annual rate of 433,000. This is 5.3% below the revised September 2008 estimate of 457,000. The median sales price of new houses sold in October 2008 was $218,000; the average sales price was $272,300. The seasonally adjusted estimate of new houses for sale at the end of October was 381,000. This represents a supply of 11.1 months at the current sales rate.
The University of Michigan Consumer Sentiment Index Fell to 55.3 in November, from 57.6 in October. The index averaged 85.6 in 2007.
Chicago PMI dropped to 33.8, the lowest since 1982. A reading below 50 shows contraction in manufacturing activity.
Data today on the employment front showed that initial jobless claims last week were 529,000, with continuing claims at 3.96 million. First-time claim for unemployment benefits declined 14,000 for the week but the four-week moving average for initial claims is now 518,000, the largest since January 1983.
Personal spending dropped 1% in October, the most since 2001. October's slide followed a 0.3% drop in September.
Durable Goods Orders fell 6.2% in October, well above the 3% drop economists had anticipated. This was the largest percent decrease in new orders since October 2006 and followed two consecutive monthly decreases including a 0.2 percent September decrease. Excluding transportation, new orders decreased 4.4 percent. Excluding defense, new orders decreased 4.6 percent. Inventories of manufactured durable goods in October, up fifteen of the last sixteen months, increased $1.4 billion or 0.4 percent to $341.1 billion. This was at the highest level since the series was first stated on a NAICS basis in 1992 and followed a 0.2 percent September increase.
Sales of new one-family houses in October 2008 were at a seasonally adjusted annual rate of 433,000. This is 5.3% below the revised September 2008 estimate of 457,000. The median sales price of new houses sold in October 2008 was $218,000; the average sales price was $272,300. The seasonally adjusted estimate of new houses for sale at the end of October was 381,000. This represents a supply of 11.1 months at the current sales rate.
The University of Michigan Consumer Sentiment Index Fell to 55.3 in November, from 57.6 in October. The index averaged 85.6 in 2007.
Chicago PMI dropped to 33.8, the lowest since 1982. A reading below 50 shows contraction in manufacturing activity.
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