Initial claims dropped a steeper than expected 33 000 to 521 000 in the most recent week, the lowest level since March, when claims peaked. The less volatile 4-week average eased to 539 750 from 548 750 previously. Also the continuing claims fell stronger than expected to a current cycle low of 6 040 000. So, overall the report suggests that the improvement in labour market conditions continued.
Wholesale inventories fell a bigger-than-expected 1.3% M/M in August, while also the July figure was revised lower. So the wholesale sector is still slashing inventories, albeit at a slower rate than in Q2. We suspect that in a few months wholesalers will have started to rebuild inventories.
EMU: German production rebounds in August
German industrial production rose by 1.7% M/M in August, close to expectations, but still down 16.8% Y/Y. The July result was downwardly revised to -1.1% M/M from -0.9% previously, but the June result was revised up by a similar amount. Based on these figures, it seems that the German economy will have grown quite strongly in Q3.
The BdF business confidence report for September confirmed the gradual recovery of the sector (and of the overall economy). The headline index rose for the seventh month in a row to 92 from 89 previously, slightly stronger than expected. The details of the report support the overall assessment with improvements of the production outlook and an increase in capacity utilization. The order level index however deteriorated, but this series is more volatile.
