during in christmas holidays from dec 22 till jan 02 there will be no reports available, next full report as from jan 05, 2009

In the week ended December 6, initial claims rose 58 000 from an upwardly revised 515 000 to 573 000, clearly above the consensus estimate of 525 000. According to Labour Department, three special factors were behind the increase: the administrative backlog by a number of states, the post-Thanksgiving peak and a relatively low hurdle posed by the week’s seasonal adjustment factor. Even more surprising was the sharp increase (338 000) in continuing claims, from an upwardly revised 4 091 000 to 4 429 000, while an outcome of 4 100 000 was expected. Both initial and continuing claims are now at their highest level since end 1982 and an improvement is not around the corner.

The trade deficit showed an unexpected widening in October (from -$56.6B to - $57.2B). Excluding petroleum products, the trade deficit shrank from -$24.64 to - $24.50, which indicates that the effect of the lower oil price was reversed by a record jump in purchases. As traditional for periods of recession, both exports and imports declined. Exports dropped 2.2% M/M, while imports dropped 1.3% M/M. Both imports and exports are expected to decline further in the coming months. Another remarkable fact was that China surpassed Canada to become the largest source of imports into the US last year.

The import price index dropped by a record 6.7% M/M in November, while the consensus was looking for a decline of 4.9% M/M. The October figure was downwardly revised from -4.7% M/M to -5.4% M/M. On a yearly basis, import prices plunged 4.4% Y/Y.


Other: Switzerland cuts its rate by 50 bps to 0.50%

The Swiss Central Bank cut its benchmark interest rate by 50 basis points from 1.00% to 0.50% as the global economic environment has sharply deteriorated over the past few months. SNB Chairman Roth added that the Bank would do everything necessary, including steps to weaken the Swiss franc or buy bonds, to support the economy, if interest rates reached zero.

In the UK, the CBI industrial trends survey showed a marginal improvement in total orders (-35 from -39), while export orders deteriorated slightly (-33 from -31). Both the volume of orders (-42) and average prices (0) stayed unchanged. Although the headline figure came out slightly better it’s too early to conclude that conditions are improving.