Instant view: Jobless claims flat; durables ex-transport up

NEW YORK (BestGrowthStock) – First-time claims for jobless benefits barely budged last week, government data showed on Thursday, suggesting the labor market is healing too slowly to drag down the unemployment rate.

U.S. consumer spending rose for a fifth straight month in November and incomes rose slightly more than expected, government data showed on Thursday, reinforcing views of a solid economic growth pace in the fourth quarter.

New orders for U.S. manufactured goods excluding transportation rose more than expected in November, to record their largest gain in eight months, according to a government report on Thursday that pointed to continued strength in the manufacturing sector.

COMMENTS:

OMER ESINER, CHIEF MARKET ANALYST COMMONWEALTH, FOREIGN

EXCHANGE, WASHINGTON:

“The data was mostly positive. Jobless claims were in line with expectations, although we continue to see the continued claims fall, which is encouraging. The headline durable goods number was certainly negative, however that’s a notoriously volatile indicator. The non-defense capital orders ex-aircraft — the key gauge of business spending — was up nicely. Personal income and spending both rose more or less in line with expectations. Overall, the data was decent. The market is hesitant to stray very far from recent ranges ahead of the long weekend. On balance, the bias remains for a stronger dollar and a weaker euro given the ongoing concerns in Europe.”

CHRISTOPHER LOW, CHIEF ECONOMIST, FTN FINANCIAL, NEW YORK:

“Jobless claims were pretty much as expected, but there were some nice declines in continuing claims, extended benefits and emergency benefits, so if there’s any takeaway it’s that the pace of hiring may have picked up a bit last week, even though there was not much change in the pace of layoffs.

“Income and consumption data was pretty close to expectations, consumer spending was maybe a little bit weaker in November but there was a nice upward revision in October.

“Durable goods, ex-transportation was up a little more than expected in November, but there was a downward revision to October, so that’s pretty much in line with what we’ve seen in the last several months. Headline orders fell because aircraft orders were down, but that’s just volatility there’s no trend there.

“The most important takeaway is probably that we have an unusual amount of data and most of it confirms the consensus view of moderate growth into the end of the year.”

PIERRE ELLIS, SENIOR ECONOMIST, DECISION ECONOMICS, NEW YORK:

“Initial claims continue to affirm that the labor market is improving at least in the sense that there are fewer layoffs. What was missing in terms of payroll employment last month, at least implicitly, was new hiring. Potentially new hiring might pick up in December. The jobless claims number encourages hopes for a stronger December payroll number, probably about 150,000 right now.

“Durable goods orders were reassuring in that we saw a manufacturing plateau over the summer and while the number released today was not strong, at least it showed some resilience in terms of capital goods orders apart from aircraft. There was concern that stagnation in manufacturing might weaken investment and the fact that investment goods orders have bounced back after falling last month is reassuring.”

MICHAEL WOOLFOLK, SENIOR CURRENCY STRATEGIST, BNY MELLON, NEW

YORK:

“All three reports came in broadly in line with expectations. The PCE core deflator has continued to slide lower, which puts us near territory that supports Bernanke’s claims that deflation is a palpable risk. However, on durables year-on-year, you have some fairly large numbers, and when you strip out commercial aircraft, it shows a strong recovery. It hasn’t been such a bad year for the economy — we think it will grow around 2.5 percent this year and 3.5 percent next year. Unfortunately, it’s been a jobless recovery.”

HUGH JOHNSON, CHIEF INVESTMENT OFFICER, HUGH JOHNSON ADVISORS

LLC, ALBANY, NEW YORK:

“Overall, these numbers are not big market movers. With the exception of jobless claims they are November numbers, so the jobless claims number is the most important number because it is forward looking. It is very much in line with expectations so I don’t expect it to have much impact on the markets.

“I am anxious to see new home sales because a big question facing us in 2011 is to what extent will housing be an ongoing drag on the economy. So that is most likely the most important number today.

“It’s going to be a quiet day anyway, and unfortunately these numbers were not exciting enough or out of line with expectations to make a significant change in that outlook.”

NICK KALIVAS, VICE PRESIDENT, FINANCIAL RESEARCH, MF GLOBAL,

CHICAGO:

“Generally it’s not too shocking to be honest with you. The durable goods orders are going to be enough to keep people thinking that the economy is improving. The trend is kind of moving the right direction toward growth – the PCE number was a little shy of expectations but I don’t think it’s going to cause people to think the consumer is slowing down relative to what we were thinking going into Christmas. I’m disappointed with the wage and salary figures; we were looking for maybe a little more strength in that category it’s but not inconsistent with the BLS labor numbers which have shown slow jobs growth.”

MARKET REACTION: STOCKS: U.S. stock index futures tick lower BONDS: U.S. Treasury bond prices extend losses FOREX: The dollar holds losses versus yen, remains higher against euro

Instant view: Jobless claims flat; durables ex-transport up