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U.S. ISM, Initial Jobless Claims, & Friday's Jobs Report

12/01/2011
As is the American way, heading into this morning’s heavy U.S. economic data releases, a “What have you done for me lately?” mindset prevailed. The October and November U.S. data points have neutralized Labor Day’s incorrect chorus, “Here comes the second recession.” For December, the expectation is for an acceleration in the modest improvement.  However, consistent with the post-2008 world, tepid and modest are the two words that best define U.S. economic growth.
 
The figures released this month lean toward tepid/modest, absent of acceleration. Tomorrow’s U.S. Labor report now takes center stage with the need for a blockbuster surprise in order to satisfy the “What have you done for me lately?” chorus. I also expect the results of this report to impact the political positioning ahead of the critical expiration of emergency unemployment benefits and the payroll tax cut.
 
TODAY’S DATA
 
Initial Jobless Claims 
•         For the holiday-shortened week, jobless claims rose 6,000 to 402,000, failing to meet consensus estimates for a drop to 390,000
•         The prior week’s 393,000 was revised higher to 396,000
•         The four-week moving average rose from 395,250 to 395,750
•         Continuing Claims rose to 3.74 million versus 3.65 million consensus estimate and last week’s 3.705 (which was revised higher from 3.691)
 
ISM Manufacturing
•         November ISM rose to 52.7 from 50.8 in October, ahead of consensus estimates of 51.8
•         Production Index rose to 56.6 from 50.1
•         New Orders rose to 56.7 from 52.4
•         Export Orders rose to 52 from 50
•         Inventory Index rose to 48.3 from 46.7
•         Customer Stockpiles rose to 50 from 43.5
•         Prices Paid rose to 45 from 41
•         Employment Index fell to 51.8 from 53.5
 
TOMORROW’S U.S. LABOR REPORT EXPECTATIONS
 
U.S. Jobs Report Consensus Estimates
•         Headline:  +125,000 versus last month’s +80,000
•         Private Sector:  +150,000 versus last month’s+104,000
•         Unemployment Rate:  Unchanged at 9.0%
•         Underemployment rate:  16.1% versus 16.2% last month

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