In the week ended January 10, initial claims rose by 54 000, from an upwardly re-vised 470 000 to 524 000, while the consensus expected an outcome of 504 000. Continuing claims, which are reported with a one-week lag, showed an unexpected decline from 4 612 000 to 4 497 000. Although the continuing claims showed an un-expected plunge, there is no reason to become more optimistic as we expect the claims to remain elevated in the coming months and deterioration is not excluded.
The New York Fed Empire State Manufacturing survey showed a modest im-provement in January. The headline index rose to -22.20 against the consensus of -25.00 and the December figure was downwardly revised from -25.76 to -27.88. The details show a mixed picture. New orders (-22.81 from -23.51), unfilled orders (-26.14 from -27.66) and average workweek (-23.86 from -26.6) improved, while ship-ments (-13.12 from -11.34), number of employees (-26.14 from -23.4), delivery times (-18.18 from -9.57) and inventories (-19.32 from -17.02) worsened. Looking at prices, prices paid dropped sharply (-18.18 from -7.45), while prices received showed a more modest decline (-3.41 from -11.7). It is important to note that historical data have been revised as all data have undergone the annual benchmark revision.
The Philadelphia Fed survey showed signs of a recovery in January. The head-line index rose unexpectedly from -36.1 to -24.3. Looking at the details, both ship-ments (-16.7 from -29.7) and new orders (-22.3 from -28.2) improved significantly, while number of employees (-39.0 from -28.6) and delivery time (-26.5 from -22.7) deteriorated sharply. Unfilled orders, inventories and average workweek stayed broadly unchanged. Prices paid (-27.0 from -25.5) continued their decline, while the decline in prices received (-26.2 from -32.8) slowed. These data indicate that pro-ducers are becoming less pessimistic about their business, but labour market conditions are still worsening. Also the Philly Fed data have undergone the annual benchmark revision.
In December, producer prices dropped by 1.9% M/M, after falling by 2.2% M/M in the month before. On a yearly basis, PPI fell 0.9% Y/Y, while a decline of 1.1% Y/Y was expected. Core PPI rose by 0.2% M/M, due to an increase in the price of cars and light trucks.
EMU: CPI falls below ECB target of 2.0%
Euro zone CPI came out in line with the earlier reported flash estimate dropping 1.6% Y/Y in December. On a monthly basis, CPI came out at -0.1% M/M (from -0.5% M/M). Core CPI, excluding food and energy, dropped from 1.9% Y/Y in November to 1.8% Y/Y in December. Looking at the details, energy (-4.7% M/M), communication (-0.1% M/M), transport (-1.9% M/M), housing (-0.7% M/M) and clothing (-0.8% M/M) dropped, while recreation and culture (2.0% M/M) and hotels and restaurants (1.0% M/M) rose significantly. Inflation is now at its lowest level in 26 months and is ex-pected to decline further in the coming months.
