Jobless Claims Fall to 45-Year Record

Last week’s economic news was slightly disappointing, as a number of indicators missed estimates, though jobless claims fell to a 45-year low. Still, given the higher than usual number of states estimating claims, the jobless claims number is a rough estimate. 

• Industrial production increased 0.9% in December, according to the Federal Reserve, bolstered by strength in activity in mining and utilities. Mining production was up 11.5% year over year and has shown strong growth each month, including December’s 1.6% gain. Manufacturing output, on the other hand, is inching ahead, with growth of 0.1% in December. The dismal growth in manufacturing output is somewhat disappointing, considering factory orders and new orders growth are considerably stronger.

• An 11.8% drop in single-family housing starts in December clouds what was otherwise a good report from the Census Bureau. Overall housing starts fell 8.2% in December to an annualized 1.192 million. Permits, or housing backlog, at 1.302 million beat consensus analyst estimates of 1.3 million.

• Jobless claims fell 41,000 to 220,000 for the lowest record in 45 years, according to the Labor Department. This figure may be misleading, as six states and two territories reported estimated figures. While Puerto Rico and the Virgin Islands continue to experience hurricane disruptions, the Labor Department noted six states (California, Arkansas, Kentucky, Maine, Hawaii, Virginia, and Wyoming) as estimates. Government offices were closed Monday for Martin Luther King Day.

• The Conference Board’s Consumer Sentiment Index slipped to a preliminary 94.4 for January, which is the softest reading in six months. This is down from December’s 95.9 and below the consensus analyst estimate of 97.0.