1)Initial jobless claims fell to a fresh post Covid low at 267k and lower w/o/w for the 6th straight week. That though was 7k more than expected.
2)The 8 bps drop in mortgage rates and 14 bps over the past 2 weeks helped to lift mortgage applications. Purchases rose 2.7% w/o/w but remain down by 4.1% y/o/y on tough comps and a moderating pace of transactions. Refi’s rose 7.4% w/o/w after 6 straight weeks of declines. They remain down by 29% y/o/y.
3)In September there were 10.44mm job openings according to the JOLTS data. It’s still tough to fill them though as hirings fell by 38k while quitters rose by another 164k, taking the quit rate to a fresh high of 3%.
4)In the NY Fed’s Survey of Consumer Expectations we saw a survey high in earnings expectations of 3%, up one tenth m/o/m. And, for one’s household finances, income growth expectations rose 3 tenths to 3.3%, also a survey high.
5)The November ZEW German investor confidence index in their economy rose to 31.7 from 22.3 and that was well better than the estimate of 20. Current Conditions in stark contrast though fell to 12.5 from 21.6 and that is because “the experts assume that the supply bottlenecks for raw materials and intermediate products as well as the high inflation rate will have a negative impact on the economic development in the current quarter.” Expectations rose because “For the 1st quarter of 2022, they expect growth to pick up again and inflation to fall both in Germany and the eurozone.”
6)The Eurozone industrial production figure for September fell .2% m/o/m, better than the forecasted drop of .5%. It’s still up 5.2% y/o/y.
7)China’s CPI in October rose just 1.5% with quite a spread between this and PPI.
8)China’s October loan data saw aggregate financing totaling 1.59T yuan, about 100b less than expected but the bank loan component was slightly above. Money supply growth accelerated to an 8.7% y/o/y increase from 8.3%.
9)China said its exports rose 27.1% y/o/y in October, better than the estimate of up 22.8%. Leading the way were shipments of household appliances, lightings, clothing, plastics, furniture and electrical products. Imports were higher by almost 21%, though that was less than the forecasted increase of 26.2%. There was a drop in the imports of commodities y/o/y except for natural gas which rose by 22% and coal by 1.9%.
10)Again, a big thank you to those military veterans that have served and a bit of levity too, //www.youtube.com/watch?v=YIaTuchm6_k
1)Continuing claims did rise to 2.16mm unexpectedly vs 2.1mm in the week prior. The estimate was for another decline to 2.05mm.
2)The October CPI rose .9% headline m/o/m and .6% core. The headline figure is 3 tenths more than expected and the core rate was 2 tenths above. Versus last year, headline inflation now has a 6 handle as in 6.2% while the core rate accelerated to a 4.6% increase. Energy prices grew by 4.8% in October alone and by 30% y/o/y. Food prices were up by .9% m/o/m and 5.3% y/o/y. Services inflation ex energy rose .4% m/o/m and 3.2% y/o/y. Housing is the biggest component and it STILL is way under calculating rent growth. Owners’ Equivalent Rent rose .4% m/o/m and 3.1% y/o/y. Rent of Primary Residence was up .4% m/o/m too and 2.7% y/o/y. Apartment List by the way said it rose twice that and 16.4% year to date. On the goods side, core goods prices jumped 1% in October alone and by 8.4% y/o/y. New car prices rose 1.4% in the month and up by 9.8% and 15.6% over the past 3 months annualized. Used car prices are accelerating again with a 2.5% m/o/m gain and up 26.4% y/o/y.
3)The Cleveland Fed’s 16% trimmed mean CPI (taking out the volatile stuff) rose .7% m/o/m and 4.1% y/o/y. That y/o/y gain is a 30 yr high.
4)The October PPI rose .6% m/o/m headline and .4% core and also .4% taking out trade. The headline and ex trade was as expected while the core increase was one tenth less. Due to rounding, all the y/o/y increases of 8.6%, 6.8% and 6.2% are as forecasted. Goods prices again led the way with a 1.2% m/o/m headline gain and .5% ex food and energy. Over the past 6 months, this figure is up 13.4% annualized. The core goods rate is up 9.2% annualized over the past 6 months. Wholesale service prices were up .2% m/o/m and are up 6.2% annualized over the past 6 months. Inflation in the pipeline remains robust with core processed goods prices up 1.1% in October alone and by 19% annualized over the past 6 months. This is not the 1970’s, it is worse at least from this measure. At the early stage measured by unprocessed goods, prices jumped 8.4% m/o/m and 1.1% core.
5)According to the October NY Fed’s Survey of Consumer Expectations, one year inflation expectations rose 4 tenths to 5.7%, another high in this 8 yr survey. Higher expectations for the prices of gasoline, college education, food and rent led the way. Inflation expectations looking out 3 years was unchanged at 4.2% after 3 straight months of increases.
6)The UoM consumer confidence index in November fell again and is down to 66.8 from 71.7 in October and below the estimate of 72.5. It’s also at the weakest level since November 2011. Blame it on inflation and falling REAL wages as one year inflation expectations rose another tenth to 4.9%, the highest since July 2008 thanks in part to a 10 pt rise in the price of gasoline component. The longer term opinion on inflation remained at 2.9% but that is still one tenth from also matching a 10 yr high. Employment expectations were unchanged but positively there was a 1 pt rise in those expecting higher income and a 3 pt drop in those who think they’ll see lower income. Evidence of the falling real wage concern though was seen in the percentage of people who think their income will outrun inflation. That fell to a 5 year low. As to the question, “Is the government doing a good job on inflation and unemployment?”, that fell to a 7 yr low. Because of ever rising prices, spending intentions took another dive. Those that said it’s a good time to buy a vehicle fell 10 pts to 49. That is the lowest level by 20 pts on record dating back to 1978. Those that said it’s a good time to buy a home declined by 15 pts m/o/m to 62, the least since 1982 when mortgage rates were dramatically higher. As for wanting to buy a major household item (if you can even get one), that fell by 7 pts to the lowest since 1980.
7)The October NFIB small business optimism index fell to 98.2 from 99.1. That matches the lowest since February. Noteworthy was the 7 pt jump in those expecting Higher Selling Prices to 53%, the highest in the 40 yr history of this survey. Also, the two compensation components rose to record highs dating back to 1984. The NFIB said “Small business owners are attempting to take advantage of current economic growth but remain pessimistic about business conditions in the near future. One of the biggest problems for small businesses is the lack of workers for unfilled positions and inventory shortages, which will continue to be a problem during the holiday season.”
8)That was one ugly 30 yr bond auction this week. The 10 yr was soft too.
9)Japan, the land of no inflation, except now, said its October PPI jumped 1.2% in the month, 3 times what was expected and is up 8% y/o/y. Go back to January 1981 the last time that happened.
10)China said its PPI in October rose 13.5% y/o/y, above the estimate of up 12.3% and after a 10.7% y/o/y gain in September. Spiking energy prices were certainly a main culprit along with higher commodity prices elsewhere.
11)The UK economy grew by 1.3% q/o/q and 6.6% y/o/y, but both 2 tenths less than expected as private consumption and business investment were light relative to expectations. Manufacturing production also missed.
12)PPI in September in the Eurozone was up 16% y/o/y and 2.7% in the month alone.