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World View & Market Commentary.
Forest first; Trees second.
Focused on Real & Knowable facts that filter through the "experts" fluff and media hyperbole. Where we've been, what the future may hold and developing a better way forward.
Estimates were needed in the December 24 week for a large number of states, seven states which isn't unusual for a holiday week but nevertheless still cloud a large 15,000 rise in initial claims to 381,000 (prior week revised 2,000 higher). The four-week average for this series grows in importance during the holidays and, despite the rise in the latest week, shows a sizable decline of 5,750 to a 375,000 level that's the best of the recovery. This is the fourth straight decline for the four-week average and the eighth decline in the last nine weeks.
Continuing claims in data for the December 17 week rose 34,000 to 3.601 million, still the four-week average is down 39,000 to 3.599 million in what is another recovery best. The unemployment rate for insured workers rose one tenth from the prior week's recovery low to 2.9 percent.
The steady downtrend in the four-week average for initial claims is tangible evidence of improvement in the labor market. Markets are showing no significant reaction to today's results.
Indications on home prices are for the most part trending downwards with Case-Shiller the latest to show contraction, at an adjusted 0.6 percent in October following a revised 0.7 percent decline in September and a 0.4 percent decline in August. For the unadjusted data, which in this series is closely watched, contraction steepened from a revised 0.7 percent in September to 1.2 percent in October. The deeper monthly contraction here likely reflects, at least in part, the dampening effects on demand from colder weather. The year-on-year comparison, where seasonality plays much less of a factor than the month-on-month comparison, both the adjusted and unadjusted series show 3.4 percent contraction which in a mild positive is a little less severe than prior months.
But the year-on-year rate won't be improving much if monthly contraction continues to extend. A look at individual cities shows a break down in Atlanta where monthly rates of adjusted decline have been 4.1 percent, 4.8 percent and 2.9 percent the last three reports. At a year-on-year minus 11.7 percent, Atlanta is the only one of the report's 20 cities to show double-digit contraction. Other weak spots include Minneapolis, Los Angeles, and Chicago as well as Las Vegas and Miami.
Home sales have been firming and reports of life in the housing and construction-related sectors are picking up. But the gains are being made at the expense of price. Next data out of the housing sector will be mortgage applications tomorrow morning.
"Sears Holding Co. .. said it will close between 100 and 120 Sears and Kmart full-line stores, citing a "difficult economic environment, especially for big-ticket items."
The Chicago Tribune reports Illinois-based Sears reported terrible holiday sales. In a statement, Sears officials said closing the stores will generate $140 to $170 million of cash, and they added the final list of stores to be closed hasn't been determined.