Initial Claims for Unemployment Insurance Rose

Initial claims for unemployment insurance increased 14,000 to 315,000 last week following a revised 4,000 drop the prior week. Consensus expectations had been for 310,000 claims and during all of July claims averaged 314,000, up a bit from 308,000 during June.

During the last ten years there has been a (negative) 78% correlation between the level of initial claims and the m/m change in nonfarm payroll employment.

The four-week moving average of initial claims rose to slightly 313,750 (-1.8% y/y).

Continuing claims for unemployment insurance rose 11,000 after a little revised 29,000 decline the prior week.

The insured rate of unemployment held steady at 1.9% where it has been since February.

Implementation of Optimal Monetary Policy from the Federal Reserve Bank of Richmond is available here.

Factory inventories rose 0.8% during June for the fifth month of firm accumulation this year. Year to date inventories have risen at a 7.8% annual rate, nearly double the rate of accumulation during all of last year.

Primary metals inventories rose 0.8% (6.2% y/y) and have been rising at a 17.2% annual rate so far this year. Inventories of computers & electronic products rose 0.4% (8.4% y/y) and the year to date annual rate of accumulation has been 9.2%. Inventories of electrical equipment jumped 2.2% (9.3% y/y) but machinery inventories ticked up just 0.1% (5.7% y/y).

Total factory orders surged 1.2%. Durable goods orders jumped 2.9% that was little revised from the advance report of a 3.1% gain. Factory orders less transportation rose just 0.1% (7.8% y/y) due to a 0.7% drop in nondurables.

Factory shipments fell 0.3%. Less transportation shipments also fell 0.2% (8.0% y/y). Petroleum shipments fell 0.2% (+20.9% y/y) and factory shipments less transportation & petroleum slipped 0.2% (+6.7% y/y).

Unfilled orders increased another 1.6% but less the transportation sector altogether backlogs still rose a strong 1.4% (14.2% y/y).

Inflation in Turkey has picked up a bit in recent months, but remains quite modest compared with Turkey's historical experience. The CPI in July was up 1.7% from June, seasonally adjusted (by Haver Analytics), and 11.7% from a year ago. June and May were both up about 10% from year-earlier levels. Our standard table shows only the last three years of data and for this period, these recent numbers would look a bit discouraging. Nonetheless, these are low. As recently as 2002, inflation ran just under 30% and from early 1994 to late 1998, the lowest 12-month reading was 75.7%, with numerous months above 100%.

Since 2003, the Turkish Statistical Institute has published some detail data. As seen in the graph, food prices are one of the sources of the recent rise in inflation. Actually so are clothing prices, but at a much lower level: year-on-year changes were in fact negative in the first few months of 2006, but that index has stabilized and even risen slightly in May, June and July. Otherwise, we see that various measures of "core" inflation are not much affected by the exclusion of food, energy and administered prices.

Note that Turkey data offerings are contained in Haver's EMERGEMA database, which includes Middle Eastern and African countries.

Haver is also accumulating a growing amount of data on other emerging markets. Late yesterday, the Statistical Office of Macedonia reported its consumer prices for June. These data are included in EMERGECW, along with other Central, Southern and Eastern European countries. Macedonia's total CPI began in 2000, with a standard breakdown starting in 2004. Over the time span available, inflation in that small nation (about the size of Vermont, according to the CIA's "World Factbook") has been quite modest. In June, the total index was 3.1% above June 2005, also a pickup the couple of years. In 2005 overall, the index rose just 1.3% and it fell in 2004 by 2.1%. Among components, food, energy and home furnishings all saw price weakness through part or all of 2005, but they have since firmed. However, their rates generally remain lower than elsewhere, with housing and utilities costs rising 1.3% in June and transportation 10.0%.