In the week ending the 15th of September, US initial jobless claims fell only marginally. Initial jobless claims dropped, from an upwardly revised 385 000 to 382 000, while the consensus was looking for a decline to 375 000. The less volatile four-week moving average increased too, from 375 750 to 377 750. Last week the claims rose as the US Labour Department said the claims were pushed up by the Tropical Storm Isaac. This week there were no special factors in the claims data mentioned, and the Labour Department added that no states reported a rise in claims related to Isaac. Therefore, it is disappointing that the claims fell only marginally from last week’s high level. It will be interesting to see whether the claims will remain high in the coming months or whether they will hover gradually back to the levels seen in August. Continuing claims, which are reported with an extra week lag, surprised on the downside of expectations. Continuing claims fell from 3 304 000 to 3 272 000.
In the US, the Philly Fed manufacturing index rose for a third consecutive month in September. The headline index increased from -7.1 to -1.9, while a more moderate increase to -4.5 was expected. The details are more mixed as shipments (-21.2 from -11.3) and inventories (-21.7 from -6.9) weakened sharply. Improvements were based in: new orders (1.0 from -5.5), unfilled orders (-21.7 from-6.9), delivery time (-8.4 from -12.2) and average workweek (-7.3 from -14.6), while number of employees rose slightly (-7.3 from -8.6). Upward cost pressures eased somewhat as prices paid dropped from 11.2 to 8.0, while prices received fell from 2.8 to -0.2.
While the upward surprise is an encouraging sign, the outcome is in sharp contrast with the Empire State index published earlier this week, suggesting that manufacturing activity continues to struggle.
EMU: ECB‘s measures unable to boost PMI’s
According to the preliminary estimate, which is based on around 85% of the usual monthly replies, euro zone manufacturing PMI picked up in September. Euro zone manufacturing PMI increased from 45.1 to 46.0, beating the consensus which was looking for an increase to 45.5. National details are however mixed as the manufacturing PMI weakened sharply in France (42.6 from 46.0), while the German manufacturing PMI rebounded from 44.7 to 47.3. The pace of contraction in output eased (45.5 from 44.4), while new orders fell at a slightly steeper rate (43.6 from 43.7). The PMI for the services sector, on the contrary, plunged to its lowest level since July 2009. According to the flash estimate, euro zone services PMI fell from 47.2 to 46.0, while a marginal improvement was expected. Also here, weakness was based in France, where services PMI fell from 49.2 to 46.1, while German services PMI rose back above the 50 benchmark level (50.6 from 48.3). Especially worrying in the services sector was that service providers’ views on the 12-month outlook deteriorated sharply, from 53.6 to 49.1, becoming the most downbeat since March 2009. The composite PMI dropped slightly, from 46.3 to 45.9, but overall continues to hover broadly sideways around the 46-level. The outcome is disappointing as most had hoped that the ECB’s measures to tackle the crisis would have supported sentiment. A slightly positive sign is the improvement in German business morale, but the outlook for the euro area remains worrying as all forward-looking indicators worsened further during the month, suggesting that the ECB’s measures were unable to lift business sentiment.