INITIAL CLAIMS & GDP: CLAIMS STILL IMPROVING, ALBEIT AT A SLOWER RATE

Takeaway: No Surprises in the final 4Q12 GDP numbers. Initial Claims continue to improve although the rate of improvement slowed in the latest week.

GDP:  The Final GDP numbers for 4Q12 came in largely as expected with the final revision reflecting 0.4% growth for the quarter vs. expectations of +0.5% and against the preliminary and 1st  revision numbers of -0.1% and +0.1%, respectively.  A summary of the final numbers and revision impacts below.   

 

Revision Breakdown - All changes are vs. 1st Revision:

  • C (Consumption):  Contribution to Chg in GDP = revised down -19 bps;  Final Q/Q growth = +1.8%
  • I (Investment):  Contribution to Chg in GDP = revised higher by +37 bps.   Final Q/Q growth = +1.3%,   Residential Investment & Non-residential fixed investment Growth of 17.6% and 14.0%, respectively
  • G (Government):  Contribution to Chg in GDP = essentially flat, revised lower by -3 bps.   Final Q/Q growth = -7.0%
  • E (Net Exports): Contribution to Chg in GDP = revised higher by +9 bps. 
  • Inventories:  Change in Private Inventories revised +3 bps  
  • Real Final Sales (Demand for U.S. Products ex Inventory change): Final Q/Q Growth = +1.9%, revised +20 bps

 

INITIAL CLAIMS & GDP:  CLAIMS STILL IMPROVING, ALBEIT AT A SLOWER RATE - GDP Summary 4Q12 Final 032812

 

 

INITIAL CLAIMS:  STILL IMPROVING, ALBEIT AT A SLIGHTLY LOWER RATE

Below is the detailed breakdown of the claims data from our head of Financials, Josh Steiner.  If you would like to setup a call with Josh or trial his research, please contact 

 

The good news is the labor market is still improving. The bad news is the rate of improvement isn't as strong as it had been. Rolling non-seasonally adjusted claims were lower YoY by 5.9% this week, as compared with 7.2% in the prior week. This rate of improvement is solid, but obviously a sequential deceleration. On a single week basis, the improvement slowed to -2.4%, down from -5.8% in the prior week. We place less emphasis on week to week moves as they've historically had significant volatility. The bottom line: the labor market is still improving, which is supportive for both credit quality and housing's momentum.

 

On the seasonally-adjusted side, the optical claims number was worse than expected rising 21k before revision to 357k. This brought the rolling SA print to 343.5k, an increase of 2.5k WoW. As this is what the market is paying attention to, it's logical that we're seeing the long end of the yield curve fall. This is incrementally bullish for housing, but obviously a continuation of headwinds on the margin. As a reminder, the SA data is now facing a small, but growing headwind over the coming six months. This headwind will peak in August 2013 and then turn into a tailwind for a final year. 

 

INITIAL CLAIMS & GDP:  CLAIMS STILL IMPROVING, ALBEIT AT A SLOWER RATE - JS 1

 

INITIAL CLAIMS & GDP:  CLAIMS STILL IMPROVING, ALBEIT AT A SLOWER RATE - JS 2

 

INITIAL CLAIMS & GDP:  CLAIMS STILL IMPROVING, ALBEIT AT A SLOWER RATE - JS 3

 

INITIAL CLAIMS & GDP:  CLAIMS STILL IMPROVING, ALBEIT AT A SLOWER RATE - JS 4

 

INITIAL CLAIMS & GDP:  CLAIMS STILL IMPROVING, ALBEIT AT A SLOWER RATE - JS 5

 

INITIAL CLAIMS & GDP:  CLAIMS STILL IMPROVING, ALBEIT AT A SLOWER RATE - JS 6 

 

INITIAL CLAIMS & GDP:  CLAIMS STILL IMPROVING, ALBEIT AT A SLOWER RATE - JS 7

 

 

Joshua Steiner, CFA

 

Christian B. Drake

 

 


SECTOR SPOTLIGHT | Live Q&A with Healthcare Analyst Tom Tobin Today at 2:30PM ET

Join us for this edition of Sector Spotlight with Healthcare analyst Tom Tobin and Healthcare Policy analyst Emily Evans.

read more

Ouchy!! Wall Street Consensus Hit By Epic Short Squeeze

In the latest example of what not to do with your portfolio, we have Wall Street consensus positioning...

read more

Cartoon of the Day: Bulls Leading the People

Investors rejoiced as centrist Emmanuel Macron edged out far-right Marine Le Pen in France's election day voting. European equities were up as much as 4.7% on the news.

read more

McCullough: ‘This Crazy Stat Drives Stock Market Bears Nuts’

If you’re short the stock market today, and your boss asks why is the Nasdaq at an all-time high, here’s the only honest answer: So far, Nasdaq company earnings are up 46% year-over-year.

read more

Who's Right? The Stock Market or the Bond Market?

"As I see it, bonds look like they have further to fall, while stocks look tenuous at these levels," writes Peter Atwater, founder of Financial Insyghts.

read more

Poll of the Day: If You Could Have Lunch with One Fed Chair...

What do you think? Cast your vote. Let us know.

read more

Are Millennials Actually Lazy, Narcissists? An Interview with Neil Howe (Part 2)

An interview with Neil Howe on why Boomers and Xers get it all wrong.

read more

6 Charts: The French Election, Nasdaq All-Time Highs & An Earnings Scorecard

We've been telling investors for some time that global growth is picking up, get long stocks.

read more

Another French Revolution?

"Don't be complacent," writes Hedgeye Managing Director Neil Howe. "Tectonic shifts are underway in France. Is there the prospect of the new Sixth Republic? C'est vraiment possible."

read more

Cartoon of the Day: The Trend is Your Friend

"All of the key trending macro data suggests the U.S. economy is accelerating," Hedgeye CEO Keith McCullough says.

read more

A Sneak Peek At Hedgeye's 2017 GDP Estimates

Here's an inside look at our GDP estimates versus Wall Street consensus.

read more

Cartoon of the Day: Green Thumb

So far, 64 of 498 companies in the S&P 500 have reported aggregate sales and earnings growth of 6.1% and 16.8% respectively.

read more