Daily Economic Update: Jobless Claims, CPI

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 highlights jobless claims and the consumer price index.

• Jobless claims somewhat unexpectedly jumped last week by 11,000 to 428,000. The large increase comes amid expectations of a decrease following the Labor Day shortened week.
• Generally, claims a lower during a shortened week because there is less time to file for a claim.  Economists generally suggest that claims below 400,000 indicate expansion of the workforce. This increase led to four-week average climbing to 419,500, a 4,000 claims increase over last month.
• Continuing claims continued to fall, by 12,000 to 3.726 million with the four-week average up 1,000 to 3.741 million. Assuming stabilization of new jobless claims, NAR expects about 1.5 net new jobs in the next 12 months.
• A separate report on prices showed inflation accelerated more than was expected for August, with the consumer price index (CPI) showing a 0.4 percent increase, following a strong 0.5 percent jump in July. Excluding food and energy, the CPI again rose 0.2 percent year-over-year which is largest increase in about three years.
• Over the past year, overall CPI inflation increased to seasonally-adjusted 3.8 percent from 3.6 percent in July, while items excluding food and energy jumped to 2.0 percent from 1.8 percent on a year-ago basis. The recent increase in prices exceeded the Fed's expected range of 1.5 to 2.0 percent which may cause the Fed to increase its current minimal borrowing rate.
• The COLA (Cost-of-Living Adjustment) for social security looks to be close to 4 percent in 2012.