Initial Claims
Initial claims fell 3k last week to 450k (falling 1k net of the revision). Rolling claims came in at 465k, a decline of 13.5k over the previous week. Reported claims are now at the low end of the YTD range of 450-470k that the series has occupied for all of 2010. While the series is improving in the last few weeks, the reality is that claims still need to be 50-75k lower than they are now before unemployment will start to improve.
Yield Curve
The following chart shows the yield curve (2-10 spread) by quarter with the chart below that showing the sequential change. The 2-10 spread (a good proxy for industry NIM) has been compressing for the past two quarters. Yesterday’s closing value of 224 bps is up from 214 bps last week.
The table below shows the stock performance of each Financial subsector over four durations.
September will be the final month for meaningful census drag on employment in the economy.
Joshua Steiner, CFA
Allison Kaptur