Each day the Research staff takes a look at recently released economic indicators, addressing what these indicators mean for REALTORS® and their clients. Today’s update discusses jobless claims, durable and non-durable goods orders, and the ISM non-manufacturing index.
- New jobless claims continued to decline last week, falling 9,000 to 397,000. Last week’s figures were revised upward by 4,000 claims. While the four-week average is sluggishly approaching the 400,000 level, it is still at 404,500. This level is more than 10,000 lower than the month-ago comparison and offers a moderately positive indication for the October employment report. Economists generally suggest that claims below 400,000 indicate expansion of the workforce.
- Continuing claims fell 15,000 to 3.683 million with the four-week average similarly down 10,000 to 3.704 million. Compared to last month’s 4-week average, current numbers are about 40,000 lower. Keep in mind that drop in continuing claims are a combination of new hiring and benefit expiration. Assuming new jobless claims stabilize, NAR expects about 1.5 million net new jobs in the next 12 months.
- Separately, data for September’s orders of non-durable and durable goods shows a more than anticipated 0.3 percent increase. Unfilled orders were also strong. New orders for non-durables were driven by orders from petroleum and coal, which are also generally sensitive to price changes. Durable orders, though slower than non-durables, were mostly driven by transportation, especially aircraft orders. This data confirms reports from other sources which show that businesses with huge cash reserves are investing in their equipment, though only slowly expanding their workforce.
- Finally, the Institute for Supply Management’s index of non-manufacturing businesses hardly changed in October, at 52.9, from September’s 53 reading. A reading above 50 suggest growth. The index covers industries ranging from utilities and retailing to health care and finance.
- Today’s data further confirms that the economy is expanding and that the chance of another economic recession in 2012 has greatly diminished.