The Banking and Strategy Initiative

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US Economy: Building on a 380,000 jobless claims, Wholesale grows 1.6%

Initial jobless claims 4wk moving average

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Yesterday’s Wholesale Trade report for October showed a growth of 1.6% well above the consensus range after a worrisome sentiment in September. The wholesale trade build was a negative draw of -0.1 in September after a low 0.1 in August during the most depressssed forecasts of the US GDP. With nearly 0.9% added in Factory orders in October and 1.6% in wholesale trade , barring a sudden drop in equipment and labor investment we are looking at nearly maintaining the initial optimistic Q4 forecasts for Q4 GDP

The initial jobless claims number was finally looking like it had let go of the 400k target  average over the 2011 reporting periods. Earlier the Services surveys showed a 4% contraction in employment expectations to 48.  however, bucking the optimistic ADP payrolls and the government payrolls report pointing to a general depression in Services to a loss of 200k jobs , sobering the results of a current performance of more than 160k job additions. Worker’s participation rate has dropped marginally in the economy and that was always an increasing number of people disintersted in finding a job

US Trade Deficit

US trade deficit has moved to a high $43.1 bln deficit in September and $44.9 bln in Aiugust as more countries were added in October and November to the list of nations worried about their bilateral trade imbalance with China. Mercantile trade has however been growing at almost 20% rates for both imprt s and exports in both 2010 and 2011 after a dull  30% yoy contraction in 2009

The November report however, again keeps the deficit at a high $43.9 bln ( data released 0830AM E T) with imports keeping pace with the spending boom in October/November

The September data predicated imprts of $225 bln a month and exports of $181 bln

Consumer Sentiment

(At 1000AM ET) The UMich consumer Sentiment also crawled up to the high end of the estimates after an all time low in September at 64.1 October’s numbers are 67.7 well beating the consensus but a number below 75 is almost a deriding of any hope. As in the Services PMI, future expectations of the component is at wide divergenec eto current sentiment of above 77 with a score of 54.6.


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