In the week ended May 2, initial claims dropped by 34 000 from an upwardly revised 635 000 to 601 000, while the consensus was looking for an outcome of 635 000. Initial claims are now at the lowest level since the week of January 24, which might be another “green shot”. Continuing claims, on the contrary, extended their upward trend and rose from an adjusted 6 295 000 to 6 351 000, which was exactly in line with expectations. In the coming months however, we would not be surprised to see another uptick in initial claims due to GM and Chrysler plant shutdowns.
EMU: German factory orders rebound in March
In Germany, factory orders showed an unexpected rebound in March. On a monthly basis, factory orders rose by 3.3% M/M, while the consensus was looking for a decline by 1.0% M/M. The previous figure was upwardly revised from -3.5% M/M to - 3.1% M/M. The breakdown shows clearly that the improvement was wide spread. This is the first increase in German factory orders in seven months which is another encouraging sign and adds to the expectations that the worst might be over.
Other: BoE extends asset purchase programme by £50 billion
The Bank of England’s Monetary Policy Committee decided to maintain rates at 0.50% stating that the world economy remains in deep recession, but added that surveys at home and abroad showed promising signs that the pace of decline has begun to moderate. On inflation, the Bank said that CPI inflation is likely to drop below the 2% target later this year. The BoE also voted to continue with its programme of asset purchases and increased the size by £50 billion to a total amount of £125 billion. The Committee expected that it would take another three months to complete the programme, and will keep the programme under review.
