Thursday, October 3, 2013

It's The Economy Stupid: Someone is at work in Washington...

There is breaking news from Washington D.C. … But not exactly the kind of news people are hoping to hear from Washington.  Initial Jobless Claims were lower than expected at 308 Thousand, versus economists’ expectations of 315 Thousand.  The previous period’s numbers were little changed.  Fewer Americans than forecast filed applications for unemployment benefits last week, indicating U.S. employers were maintaining staff counts in the days leading up to the government shutdown.   Jobless claims rose by 1,000 to 308,000 in the week ended Sept. 28, from a revised 307,000. Continuing claims jumped as California worked through its backlog of applications following a change in computer systems.  The figures show business leaders remained confident enough in the economy to hold the line on firings even as gridlock in Washington pointed to an imminent partial closing of federal government agencies. Fewer dismissals lay the ground for bigger gains in payrolls and wages that will help sustain consumer spending, which accounts for about 70 percent of the economy.


Challenger Job Cuts total came in at a 19% increase from the planned job cuts announced a year earlier, marking the fourth consecutive month of year-over-year increases in job cuts.  However, the 19% increase in job cuts was much lower than the prior number of 56.5%.  Planned job cuts by U.S.-based employers in September fell to its lowest level in three months, according to new data from outplacement firm Challenger, Gray & Christmas Inc.  Employers plan to reduce payrolls by 40,289 positions in September, a 20% decline from August when job cuts reached a six-month high. Planned job cuts for the third quarter totaled 128,452, a 25% jump from a year earlier and a 13% increase from the second quarter.  Challenger noted that despite the recent surge, the overall pace of job cutting in 2013 is roughly unchanged from last year. To date, employers announced 387,384 job cuts, up 0.4% from the cuts announced from January through September 2012.


RBC Consumer Outlook Index was down slightly to 50.7 versus the prior period’s 51.1.  Despite more optimism on jobs, U.S. consumers pulled slightly back on their economic confidence at the start of this month, according to data released Thursday.  The Royal Bank of Canada said its U.S. consumer outlook index declined to 50.7 from 51.1 in September. The RBC current conditions index declined to 40.1 from 41.0 in September. The expectations index slipped to 59.1 from 59.3.  U.S. consumers are more upbeat about jobs and job security. The October employment index rose to 60.2 from 60.1. This month's reading is the highest since October 2007.


Economic Event


Economic Survey

Actual Reported

Original Prior

Revised Prior

Challenger Job Cuts YoY






RBC Consumer Outlook Index






Initial Jobless Claims

Sep 28





Continuing Claims

Sep 21





Bloomberg Consumer Comfort

Sep 29





ISM Non-Manf. Composite









John Broussard

Assistant State Treasurer

Chief Investment Officer

State of Louisiana

Department of the Treasury



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