The New York Empire State manufacturing index rose from 18.88 to 34.57 in October, the highest level in more than five years, while a slight decline was expected. The breakdown shows a sharp increase in shipments (35.08 from 5.34), new orders (30.82 from 19.84), number of employees (10.39 from -8.33) and average workweek (20.78 from 5.95), while both prices paid and received fell somewhat. Inventories rose from -25.00 to -18.18, but remain firmly in negative territory. The significant improvement in both number of employees and average workweek indicate that labour market conditions start to improve in the manufacturing sector.
The Philadelphia Fed, on the contrary, dropped from 14.1 to 11.5, marginally below the consensus estimate. The breakdown shows a mixed picture with improvements in new orders (6.2 from 3.3), number of employees (-6.8 from -14.3) and unfilled orders (-1.3 from -7.4), while shipments (3.3 from 8.2) and inventories (-31.8 from - 18.1) deteriorated. Both prices paid and received rose in October.
In the week ended October 10, initial claims dropped by 10 000 from an upwardly revised 524 000 to 514 000, while the consensus was looking for an outcome of 520 000. Also continuing claims surprised on the downside of expectations falling from a revised 6 067 000 to 5 992 000, while a figure of 6 000 000 was expected. Initial claims are now at the lowest level since the beginning of the year, providing further evidence that the number of job losses is declining.
In September, US CPI inflation rose from -1.5% Y/Y to -1.3% Y/Y, slightly above the consensus estimate of -1.4% Y/Y. On a monthly basis, inflation rose by 0.2% M/M. Core CPI, excluding food and energy rose from 1.4% Y/Y to 1.5% Y/Y, while a stable figure was forecasted. The higher core reading was due to significant price increases in transportation (due to the end of the Cash for Clunkers program) and tobacco (caused by tax hikes for cigarettes).
EMU: September CPI confirmed at -0.3% Y/Y
In September, the final figure of euro zone CPI confirmed the first outcome of -0.3% Y/Y. On a monthly basis however, CPI inflation came out flat, while the consensus was looking for a marginal increase (0.1% M/M). Looking at the details, prices of energy, hotels, restaurants, recreation, culture and transport fell significantly, while prices of clothing (6.5% M/M) and education (0.8% M/M) rose considerably. Core CPI dropped from 1.3% Y/Y to 1.2% Y/Y, exactly matching expectations. From October onwards, annual inflation is expected to increase again, due to base effects from last year’s sharp increase in energy prices.
