Initial Claims for Unemployment Insurance Down

November 21, 2002

By Tom Moeller

· Initial claims for unemployment insurance were lower than expected in the latest week at the lowest level in four months. Claims in the prior week were revised up slightly.

· The latest figure is for the survey period for November nonfarm payrolls. Initial claims were down 38,000 (9.2%) from the October survey period.

· There has been a 65% correlation during the last ten years between the level of initial claims and the m/m change in nonfarm payrolls.

· The four-week moving average of initial claims dropped to 395,750, down 10.3% y/y.

· Continuing claims for unemployment insurance fell 1.7% w/w from the prior week's elevated level which was little revised.

· The insured rate of unemployment fell slightly to 2.8%, back to the average of the last four months. 

 
Unemployment Insurance (000s)

11/16/02

11/09/02

Y/Y

2001

2000

1999
Initial Claims 376.0 401.0 -11.5% 405.8 299.8 297.7
Continuing Claims -- 3,582 -2.0% 3,021 2,114 2,186

 

Leading Indicators Unchanged

November 21, 2002

By Tom Moeller

· The Composite Index of Leading Economic Indicators, reported by the Conference Board, was unchanged last month, as expected. Prior months' declines were revised deeper.

· The breadth-of-gain amongst the leaders' component series improved sharply to 60% from a downwardly revised level of 35% in September. The six-month diffusion index remained at a low 50%.

· Lower claims for jobless insurance and a higher money supply had the largest positive influences on the leading index in October offset by lower consumer expectations and vendor deliveries and a shorter workweek. 

· The ratio of coincident-to-lagging indicators was unchanged. The ratio is an indicator of excess relative to actual economic performance.

· The coincident indicators and the lagging indicators were unchanged.

· The Leading index is based on eight previously reported economic data series and two that are estimated. 

 
Business Cycle Indicators

Oct

Sept

Y/Y

2001

2000

1999
Leading 0.0% -0.4% 2.0% -0.7% 1.1% 3.3%
Coincident 0.0% 0.0% 0.7% -0.5% 3.4% 3.2%
Lagging 0.0% -0.5% -3.8% -1.3% 2.8% 1.7%

 

Philadelphia Fed Index Improved

November 21, 2002

By Tom Moeller

· The Philadelphia Fed’s index of general business conditions for November improved more than expected. The Business Activity Index rose to 6.1, the highest level since July. A reading of -5.0 had been expected.

· The improvement mirrored the rise reported last week in the Empire State General Conditions Index for November.

· Amongst the sub indexes, new orders improved sharply and shipments turned positive versus their negative readings last month. Employment was virtually flat.

· The business conditions index reflects a separate survey question, not the components.

· The prices paid index fell moderately, but remained quite positive as it has since March.

· During the last ten years there has been a 46% correlation between the level of the General Activity Index and the quarterly change in real GDP. Over the last twenty years that correlation has been 67%.

· For a discussion of the Philadelphia Fed's Business Outlook Survey click here.
 
Philadelphia Fed Business Outlook

Nov

Oct

Y/Y

2001

2000

1999
General Activity Index 6.1 -13.1 -18.5 -17.3 8.2 13.3
Prices Paid Index 13.0 14.3 -17.6 -1.0 27.1 10.0

 

U.S. Budget Deficit Deepened in October

November 21, 2002

By Tom Moeller

· The US budget deteriorated last month versus Consensus expectations for a $45 bil. deficit.

· Receipts fell sharply m/m in payback for the 54.7% surge in September. Individual tax payments fell m/m and were down 13.0% from last year.

· Federal expenditures surged m/m following a decline in September and were up 8.6% y/y. Defense spending was up 15.2% y/y. Spending on transportation and education also continued strong.

 

 

 
US Government Finance

Oct

Sept

y/y

FY2002

FY2001

FY2000
Budget Balance $-54.0B $42.5B $-7.7B $-158.5B $127.1B $125.5B
  Revenues $124.9B $192.8B -20.5% -6.9% -1.7% 10.8%
  Outlays $178.9B $150.3B 8.6% 7.9% 4.2% 5.1%

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