Jobless claims drop, durable goods orders rise …

posted at 9:21 am on July 26, 2012 by Ed Morrissey

The US economy got a couple of pieces of good news — as long as one doesn’t look too closely at the details.  First, the weekly jobless claims level dropped to 353,000, the second time in three weeks the series has seen a significant decline:

In the week ending July 21, the advance figure for seasonally adjusted initial claims was 353,000, a decrease of 35,000 from the previous week’s revised figure of 388,000. The 4-week moving average was 367,250, a decrease of 8,750 from the previous week’s revised average of 376,000.

The advance seasonally adjusted insured unemployment rate was 2.6 percent for the week ending July 14, unchanged from the prior week’s unrevised rate.

The advance number for seasonally adjusted insured unemployment during the week ending July 14 was 3,287,000, a decrease of 30,000 from the preceding week’s revised level of 3,317,000. The 4-week moving average was 3,309,000, a decrease of 3,750 from the preceding week’s revised average of 3,312,750.

That would be good news, but the recent volatility in the series leads one towards a little skepticism, especially since each week provides a new upward revision to the last report.  Two weeks ago, the obvious issue was the Independence Day holiday, which always plays hob with this measure.  There were no holidays last week, so presumably this is more solid.  We’ll see soon enough.

According to Steve Eggleston, CNBC’s anchors were skeptical of the number, too:

Second, we have the durable goods report, which shows a 1.6% increase in June, which will definitely add some pop to Q2′s GDP rating, due out tomorrow.  However, there is a huge caveat in the report:

New orders for manufactured durable goods in June increased $3.4 billion or 1.6 percent to $221.6 billion, the U.S. Census Bureau announced today. This increase, up two consecutive months, followed a 1.6 percent May increase. Excluding transportation, new orders decreased 1.1 percent. Excluding defense, new orders decreased 0.7 percent. Transportation equipment, up four of the last five months, had the largest increase, $5.1 billion or 8.0 percent to $68.8 billion.

Without transportation, the measure actually dropped 1.1%, and without defense — federal spending — it dropped 0.7%.  Defense aircraft and parts orders rose 23.9%, which looks suspiciously like an intervention in what otherwise would have been a very bad month. On the other hand, non-defense aircraft and parts rose 14.3%, too.

That dodge didn’t fool Reuters:

The Commerce Department said on Thursday durable good orders excluding transportation dropped 1.1 percent, the biggest decline since January, after rising 0.8 percent in May. Economists had forecast this category being flat last month.

Overall orders increased 1.6 percent as demand for aircraft surged, after an upwardly revised 1.6 percent increase the prior month. …

Details of the report were generally weak, with declines in new orders for computers, fabricated metal products, electrical equipment and appliances and machinery.

Despite the big burst in transportation spending, auto orders dropped by the largest percentage since September, a decline of 0.6%.

The AP cautions against too much confidence in the jobless claims figures:

Applications surged two weeks ago, reversing a big drop the previous week. But economists caution that the government struggles every July to account for temporary summer shutdowns in the auto industry. The adjustments have been unusually difficult this year because some automakers skipped their shutdowns in the face of stronger sales, resulting in fewer temporary layoffs.

And retail sales fell again in June:

Retail sales fell in June for the third straight month, bad news for a country that gets two-thirds of its economic output from consumer spending. Manufacturing activity shrank in June for the first time in three years, according to a closely watched survey from the Institute of Supply Management.

The perhaps-specious drop in the jobless claims number might put the Fed off from initiating a new round of quantitative easing, though.  CNBC warned earlier in the morning that a bad report might leave the Fed no choice:

As traders try to game the Federal Reserve, Thursday’s weekly jobless claims will be a key piece of data ahead of next week’s FOMC meeting.

“Europe will drive the bus, but if we get a nasty surprise in initial claims that could have a big effect. Then you’ll really hear everybody saying … this is bad enough. The Fed will have to act,” said Art Cashin, director of floor operations at UBS.

Claims data will be released at 8:30 a.m. ET and are expected to show 380,000 claims, down from 386,000 last week. There is also a durable goods report at 8:30 am and one for pending home sales at 10 a.m. The Treasury auctions $29 billion 7-year notes at 1 p.m.

The rest of the news might be bad enough to push the Fed into action, but that jobless claims report may force them to stay on the sidelines to avoid being accused of acting politically rather than responsibly.


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Greatest administration Evaaaaaaaaaaaaaaa!!!!!

Baxter Greene on July 26, 2012 at 9:25 AM

No more money printing regardless of how much losers like Chuck-you Schumer get their panties in a twist.

gsherin on July 26, 2012 at 9:26 AM

The total number of people claiming benefits in all programs for the week ending July 7 was 6,034,225, an increase of 280,405 from the previous week.

4.6% increase in week!

faraway on July 26, 2012 at 9:27 AM

That’s my President!
-Black American voter.

tom daschle concerned on July 26, 2012 at 9:28 AM

“The Fed will have to act,” said Art Cashin, director of floor operations at UBS.

Grrr. Just wait ’til Ron Paul’s bill gets passed in the Senate…

Fallon on July 26, 2012 at 9:28 AM

Well, jobless claims dropped to 350k.
On the long-term economy, we are headed down the drain with Obama, but we better wake up fast and realize their are a lot bigger issues than the short-term economy, and we can win if O succeeds in making this election about the economy, not his radical leftism and the out of control govt.

anotherJoe on July 26, 2012 at 9:28 AM

correction: we can’t win if O succeeds in making the election about the economy, not his radical leftism and the out of control govt

anotherJoe on July 26, 2012 at 9:30 AM

It will be tough doing the press conference today from the White House over all those screams of “Hosana in the highest!!”

NickDeringer on July 26, 2012 at 9:30 AM

anotherJoe on July 26, 2012 at 9:30 AM

I think you were right the first time.

Fallon on July 26, 2012 at 9:32 AM

To be fair to the CNBC anchors, they apparently also said to not trust the 3868K number last week. They seem to think that the true number is in the 370K-375K range.

One more oddity pointed out by Tom Blumer in his pre-release preview – the seasonal adjustment is higher than last year’s for the third week in a row, which causes the seasonally-adjusted number to be lower. This week, had last year’s adjustment been used, it would have been just short of 4% lower.

As long as QE3 doesn’t leave the dock,….

Steve Eggleston on July 26, 2012 at 9:33 AM

I think our bad economy is proportional to corruption in the country, yet, HA still is mum about the libor scandal! maybe because of stuff like this:
http://host.madison.com/ct/news/opinion/column/john_nichols/john-nichols-activists-up-the-ante-on-romney-s-london/article_0ed4aff8-d71e-11e1-a583-0019bb2963f4.html

Mitt Romney will show his true colors tonight, when he slips behind closed doors in a foreign city to collect money from international bankers who are mired in scandal.

Romney, whom fellow Republicans describe as a “vulture capitalist,” may be in London to cheer on the U.S. team in the Olympics. But when it comes to economics, his loyalty does not appear to be to Team USA. Rather, it’s to the banking-industry insiders who know no country — and, it would appear, know few ethical bounds.

London is abuzz over the LIBOR (London InterBank Offered Rate) scandal, which saw some of the biggest banks in the world report false interest rates in order to fool investors and game the international economy. Bob Diamond, the top man in Barclay’s Bank, had to resign from his position after than bank paid almost $500 million in fines.

Diamond also resigned as the co-chair of Mitt Romney’s $75,000 a person fundraising event in London tonight.

Not to worry. Another Barclay’s insider (chief lobbyist Patrick Durkin) took Diamond’s place as a co-chair for the Romney event, along with officials of Bank of Credit Suisse, Deutsche Bank, HSBC, Goldman Sachs, Blackstone and Wells Fargo Securities — and, of course, Bain Capital Europe.

As the investigation of banks implicated in LIBOR rate-fixing expands, Romney’s decision to go ahead with the London fundraising events is an act either of boldness or recklessness. The presumptive Republican nominee for president seems to think he can get away with raising millions of dollars in a foreign capital from scandal-plagued international bankers.

But grassroots activists in the U.S. are upping the ante by demanding that Romney immediately reveal the names of the bankers and financial insiders attending his London fundraising events. In particular, they are pushing for the release of any and all information relating to Romney’s interactions with donors associated with Barclays and any other institutions that have been linked to the LIBOR scandal.

The Center for Responsive Politics identifies Barclays as the largest source of campaign donations to Romney, and a Maine state legislator who has been in the forefront of campaign finance reform and corporate watchdog fights wants to know more about the relationship between Romney and the Barclays donors.

“Americans have a right to know who Romney’s donors are so they can understand what policy agendas are in line with those donations,” says Maine state Rep. Diane Russell, D-Portland. “We all have the right to donate to political campaigns, and the responsibility to own up to those donations. It’s part of the democratic process.”

Russell has started a national petition drive demanding that Romney come clean about the Barclays ties and the London fundraising event.

The “Mitt Romney: Reveal Your Secret Donors” petition reads:

It’s time we return to government of, by and for the people — not government of, bought, and paid for by special interests. The job of a Wall Street banker is to get a good return on their investment, and unfortunately, they’ve taken those skills to Washington — and now the presidency.

Mitt Romney is attending an elite London fundraiser — $25,000 to $75,000 per plate — hosted by the CEOs at the center of the LIBOR scandal threatening our already fragile economy. Executives of at least three other banks under investigation are co-chairs of the fundraiser, according to invitations obtained by The Washington Post.

At the same time, too many Americans are falling out of the middle class when they are working hard to climb the ladder into it. In fact, middle-class workers have seen their incomes drop by nearly 8 percent in three years and their wealth disappear by a staggering 40 percent.

We believe politicians should work for us, not their corporate sponsors. It is time for Mitt Romney to fully disclose his donors — and how much they are giving to his campaign.

Russell set out to collect 10,000 signatures.

She’ll get them. And a lot more.

the dems are gearing up to associate romney to the libor scandal.

nathor on July 26, 2012 at 9:34 AM

Thank you business owners…

You did that…

Electrongod on July 26, 2012 at 9:35 AM

The total number of people claiming benefits in all programs for the week ending July 7 was 6,034,225, an increase of 280,405 from the previous week.

4.6% increase in week!

faraway on July 26, 2012 at 9:27 AM

That’s hard numbers, not seasonally adjusted. Therefore, week-to-week comparisons are tricky at best.

For a different reason (the winddown of both the Emergency Unemployment Compensation and the higher tiers of Extended Benefits), a year-over-year comparison of all programs is also problematic. I’ve taken to looking at the Regular State (26-week) claims, which week-ending 7/7 were 3.353 million. That is just under 419,000 less than last year’s, which is right in the ballpark of what the last couple months have been.

Steve Eggleston on July 26, 2012 at 9:38 AM

the dems are gearing up to associate romney to the libor scandal.

nathor on July 26, 2012 at 9:34 AM

Romney had nothing to do with it, however Obama’s road and bridges are 100% complicit.

tom daschle concerned on July 26, 2012 at 9:38 AM

…shhhhhhhh!…(to be revised on a Friday night news dump 2 months from now!)
.
.
.
MSM: JugEars PLAN is working!
…we’re on the right path…give it more time!
…JugEars is jesus!

KOOLAID2 on July 26, 2012 at 9:42 AM

Romney had nothing to do with it, however Obama’s road and bridges are 100% complicit.

tom daschle concerned on July 26, 2012 at 9:38 AM

True, but what does the truth have to do with Democrat campaigning?

Nathan_OH on July 26, 2012 at 9:42 AM

Reagan 4 years after “inheriting” Jimmah’s economy, 7.2% Growth. And he didn’t whine about inheriting it.

kirkill on July 26, 2012 at 9:44 AM

True, but what does the truth have to do with Democrat campaigning?

Nathan_OH on July 26, 2012 at 9:42 AM

Ask moral reprobate nathor.

tom daschle concerned on July 26, 2012 at 9:44 AM

If business owners don’t build businesses, isn’t Obama responsible for the 8.2% unemployment?

faraway on July 26, 2012 at 9:45 AM

I think you were right the first time.

Fallon on July 26, 2012 at 9:32 AM

Lol sort of, except, NO i was not right. The economy is likely to do ok, not go into free fall anyway. O will be able to maintain that he’s “done ok under the circumstances” with the economy. But O will not be able to argue that the fact that he has ballooned the size of govt is ok. All that is required of us to win is that we start making the primary issue the out of control govt, and actually when the issue of the short-term economy comes up, talk about the long-term economy, and the govt gone wild. And the economy as the main issue neutralizes the issue of O’s crazy leftism. His extreme leftism has terrible impacts far far beyond the short-term economy, and the people don’t like it. But you have to make an issue of it, because the people may be swayed by O’s propaganda.

anotherJoe on July 26, 2012 at 9:47 AM

the dems are gearing up to associate romney to the libor scandal.

nathor on July 26, 2012 at 9:34 AM

I wouldn’t bet the farm on it.

Bernanke Knew About LIBOR Scandal Four Years Ago

btw, I heard there’s some Union offering a reward for information on where Romney will be tonight, be sure you get your “fair share” of it.

Flora Duh on July 26, 2012 at 9:49 AM

Bloomberg: “Business owners should go on strike until unemployment improves”

faraway on July 26, 2012 at 9:50 AM

I’m guessing they did not factor in the more than 20.000 people who went on SS disability in July.

Philly on July 26, 2012 at 9:50 AM

I wonder if the reported orders for Boeing from the Farnborough Air Show a couple of weeks ago are included in this report – Over $50B. The big airshows often generate a lot of orders (a fun time for the inking and annoucement of contracts).

rlynds on July 26, 2012 at 9:51 AM

Yeah, right.

I don’t care how you slice it:

+>8% of the country is not working.

The Dollar is weaker now than 4 years ago.

BTW? Attacking those of us taxpayers & wealth creators that truly foot the bill for this clusterfark…and then telling us “You didn’t do that on your own”.

Yeah, MSM…keep trying to sell that s**t sandwich as Roast Beef…

BlaxPac on July 26, 2012 at 9:55 AM

His extreme leftism has terrible impacts far far beyond the short-term economy, and the people don’t like it. But you have to make an issue of it, because the people may be swayed by O’s propaganda.

anotherJoe on July 26, 2012 at 9:47 AM

The “people” voted for Obama after seeing videos of him saying that energy costs would “necessarily skyrocket”, after hearing him say “spread the wealth around”. People knew he was friends with the likes of Bill Ayers and it did not matter. American children have been taught that the collective is above the individual. They have been taught that progressivism is what “Democracy looks like” and conservatism is mean and extreme.

But, if they have any pride left, most Americans want to work. It’s the economy. People know what Obama has done is not working, double entendre intended.

Fallon on July 26, 2012 at 9:56 AM

Transportation equipment, up four of the last five months, had the largest increase, $5.1 billion or 8.0 percent to $68.8 billion.

Gotsta get out there and build us some roads so the proles can have they some “opportunity.”

ted c on July 26, 2012 at 9:58 AM

I wouldn’t bet the farm on it.

Bernanke Knew About LIBOR Scandal Four Years Ago

btw, I heard there’s some Union offering a reward for information on where Romney will be tonight, be sure you get your “fair share” of it.

Flora Duh on July 26, 2012 at 9:49 AM

(:->)
…that numbnuts won’t care!

KOOLAID2 on July 26, 2012 at 9:59 AM

Flora Duh on July 26, 2012 at 9:49 AM

From your link:

What progressives continually fail to understand is that you can have 30 Dodd-Frank “reform” efforts, but if regulators are in at least tacit collusion with corrupt bankers, the entire regulatory edifice is pointless.

The Obama Administration has known from day-one that some banks were manipulating a foundation of the financial system for their own benefit. And they did nothing.

Nathor, would you like to comment?

Fallon on July 26, 2012 at 10:01 AM

The “people” voted for Obama after seeing videos of him saying that energy costs would “necessarily skyrocket”, after hearing him say “spread the wealth around”. People knew he was friends with the likes of Bill Ayers and it did not matter….

Fallon on July 26, 2012 at 9:56 AM

At least if they read Hot Air/AoSHQ/et al, listened to Limbaugh/Hannity/et al, or watched Fox News. The rest of the presstitutes barely covered the “skyrocket” and “spread” comments, and didn’t even mention Ayers.

But, if they have any pride left, most Americans want to work. It’s the economy. People know what Obama has done is not working, double entendre intended.

Hence the big push to get people hooked on welfare.

Steve Eggleston on July 26, 2012 at 10:03 AM

I’m guessing they did not factor in the more than 20.000 people who went on SS disability in July.

Philly on July 26, 2012 at 9:50 AM

To the extent that 20+K came off the unemployment rolls, they did.

Steve Eggleston on July 26, 2012 at 10:05 AM

Reagan 4 years after “inheriting” Jimmah’s economy, 7.2% Growth. And he didn’t whine about inheriting it.

kirkill on July 26, 2012 at 9:44 AM

Comment of the Day™, and Reagan never had the House.

Steve Eggleston on July 26, 2012 at 10:06 AM

Surprisingly good report – very unexpected. We’re still trying to figure out the fluctuations in the first time claims, but we like the fact that the 4-week average continues to drop. The Durable Goods order was mostly aircraft, but they revised May up so that may explain some of the June dropoff. Even taking transportation out, year over year June 2012 orders are up over 3% above June 2011, and if you add in transportation the year-on-year shows a solid 8.0% growth, even better than May. Throw in Draghi’s “Euro or nothing” comments, and it’s party time on The Street … Dow’s up almost 250 and heading towards 13K again. But let’s see what tomorrow’s GDP report brings …

TouchdownBuddha on July 26, 2012 at 10:13 AM

The “people” voted for Obama after seeing videos of him saying that energy costs would “necessarily skyrocket”, after hearing him say “spread the wealth around”. People knew he was friends with the likes of Bill Ayers and it did not matter. American children have been taught that the collective is above the individual. They have been taught that progressivism is what “Democracy looks like” and conservatism is mean and extreme…

Fallon on July 26, 2012 at 9:56 AM

O got elected -despite- America’s revulsion with the bad things you mentioned. McCain was so absolutely horrible, and the people had had enough of Bush, that they went for O, and many liked the idea of having a first black president.
But the majority of independents our deeply incensed, even shocked, that this country is turning into a collective big govt country. That’s what the election is about, whether we turn into a virtual socialist state or not, at least that what’s the election should be about if we want to win. Not the short-term economy. If we “divert” from the bigger more important issue by talking about the economy, honestly, we probably end up losing. I can see it now.

anotherJoe on July 26, 2012 at 10:15 AM

the dems are gearing up to associate romney to the libor scandal.

nathor on July 26, 2012 at 9:34 AM

That’s one hell of a news source you got there.

Mitt Romney will show his true colors tonight, when he slips behind closed doors in a foreign city to collect money from international bankers who are mired in scandal.

That’s illegal. Apparently your news filter is so out of whack you can’t distinguish between an obvious smear piece and real news. Not even Obama would be stupid enough to collect foreign donations in such a manner.

Romney, whom fellow Republicans describe as a “vulture capitalist,”…

I can see how you might have been fooled into believing they might be an honest news source…

“When I need the hard hitting news of the day I find the nearest communist rag!” – nathor

NotCoach on July 26, 2012 at 10:17 AM

remember

anybody but OBAMA

losarkos on July 26, 2012 at 10:17 AM

Difficultas_Est_Imperium on July 26, 2012 at 10:08 AM

Breitbart isn’t a communist rag, so it is obviously a suspect news source.

NotCoach on July 26, 2012 at 10:18 AM

The economy acted stupidly.

- BHO

pain train on July 26, 2012 at 10:42 AM

…people running out of unemployment benefits put off the rolls, and business replacing inventory??

Mimzey on July 26, 2012 at 11:17 AM

First, the weekly jobless claims level dropped to 353,000, the second time in three weeks the series has seen a significant decline

Considering that the actual unemployment rate is 15% to 16%, what is so great about having 0ver 700,000 people who can’t find work? A drop of 35,000 while helpful is nowhere near enough to make a noticeable dent.

The economy is all the proof anyone needs that Odumbass doesn’t have a clue about what he is doing.

woodNfish on July 26, 2012 at 11:20 AM

Wait, it will get worse, quickly. The media must be getting frantic.

arand on July 26, 2012 at 11:23 AM

Let them try:

What progressives continually fail to understand is that you can have 30 Dodd-Frank “reform” efforts, but if regulators are in at least tacit collusion with corrupt bankers, the entire regulatory edifice is pointless.

The Obama Administration has known from day-one that some banks were manipulating a foundation of the financial system for their own benefit. And they did nothing.

Difficultas_Est_Imperium on July 26, 2012 at 10:08 AM

great, I also think this is will hurt both dems and repubs! but why HA ignores stories where dems are grilled on it!?

nathor on July 26, 2012 at 11:26 AM

“When I need the hard hitting news of the day I find the nearest communist rag!” – nathor

NotCoach on July 26, 2012 at 10:17 AM

i got it from google news putting keywords “libor romney”. i know it was biased, that is obvious. but the core of the news is correct, romney is going to get some money from Barkley executives when the bank is now politically toxic.

nathor on July 26, 2012 at 11:30 AM

Fallon on July 26, 2012 at 9:56 AM

Fallon, I had a couple more thoughts. You implied that the McCain defeat shows that the majority of the people have accepted leftist radicalism as ok, and rejected conservatism as not ok. So, your reasoning is, find a ground where leftism and conservatism is not an issue: the economy, as the economy is the one area where we can prevail. The short-term economy is a small sliver of an issue in relation to the full gamut of issues we face. Nevertheless, it’s as if you call for everyone to stand just on that sliver (the economy), and further that we should indeed try to obscure the issue of conservatism vs leftism.
But Gallup has it as ~ 42% call themselves conservative, and just 21% liberal. 2 to 1 in favor of conservatives. No, the people don’t want this unbridled leftism foisted upon them. That’s what we need to make the election about. Look what happened in the 2010 elections: huge defeats for democrats across the board.

If we say that the election is simply a question of whether we want to be left or right, we win on that.

And don’t let O obscure the fact that he’s a radical leftist. And get the focus off the short-term economy, because if the economy upticks a bit or stays the same in the next 3 months, O has his plausible justification for victory. No, the election is a question of whether as a nation we want to be conservative or leftist.

anotherJoe on July 26, 2012 at 11:40 AM

The orders are coming in so strong, the manufacturing company I work for is forcing it’s employees to take a week off this quarter (paid) and other companies in the industry are facing shutdowns and layoffs. We make parts that go in just about everything listed as a durable good. If it weren’t for the fact that our company’s executives and CEO are competent as hell, I’d be worried, rather than merely concerned. Fortunately, the company execs seem to have seen this coming and responded promptly.

Random Numbers (Brian Epps) on July 26, 2012 at 12:03 PM

TD – I would like to believe, but that isn’t how it is working out here. Big ticket durables and construction/mining equipment is softening big time.

Hiring isn’t happening still, lots of business money and investment on the sidelines. Yes the street likes the news and loves Europe’s latest plan to save themselves and so the market rallies wildly until reality sets in next week and we start the march back down.

If Obama is re-elected we will face another four years of this – with more unemployment as Obamacare sets in and the employers start dropping employees – and what happens when companies throw their employees into the exchanges and they aren’t ready. The feds won’t be and most states are doing nothing – many have no intention to start. In 2014 for 2 or 3 grand I can dump my employees in the exchange. What exchange?

We are in hold mode right now – if we get Obama again, it will be worse.

Zomcon JEM on July 26, 2012 at 1:24 PM

All I know is that there are several large purchases I’d like to make: a new refrigerator, some furniture and possibly a car to replace one. We have made the conscious decision to not make any large purchases until after the election. No way am I going to do anything to add to the GDP.

Also, I’m ticked that the maximum for my pretax Flexible Spending Account for out of pocket expenses was limited to $2500 this year. So there is no way I’m going to do anything that might help obama’s re-election in the least.

Angineer on July 26, 2012 at 3:47 PM