Weekly Initial Jobless Claims Increase To 283k

Initial jobless claims for the week ending October 18 were a seasonally adjusted 283k, up from the prior week’s revised reading of 266k. Not seasonally adjusted, jobless claims for the week were 255k.

Claims

Individual states that had changes in claims of more than 1k (not seasonally adjusted):

States

The 4-week moving average of initial jobless claims was 281k. That’s the lowest since May 2000.

Jobless Claims 4W

The number of unemployment insurance recipients, or continuing claims, for regular state programs was 2.351 million, down from the previous week’s revised reading of 2.389 million.

Unemployment Insurance Recipients

The insured unemployment rate, which is the number of unemployment insurance recipients as a share of covered employment, was 1.77%, down from 1.80% the week prior.

Insured Unemployment

90.54% of all U.S. jobs are covered by state unemployment insurance programs.

Covered Employment

Of the 9.262 million Americans currently unemployed, 25.38% receive unemployment insurance.

UI Recipients as Share

Jobless claims and the unemployment rate:

Labor Market

Little Change In U.S. Inflation In September

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.1% in September on a seasonally adjusted basis, as reported by the U.S. Bureau of Labor Statistics. Over the last 12 months, the all items index increased 1.7%.

The core CPI, which excludes food and energy, also increased 0.1% in September and is also up 1.7% year over year.

CPI Monthly

CPI Annual

The All Food index increased 0.3% in and is up 3.0% from a year ago. The All Energy index decreased 0.7% and is down 0.6% from a year ago.

Energy Commodities in particular were down 1.1% in September and 3.3% from a year ago.

CPI Table

CPI Components

The Producer Price Index for final demand decreased 0.1% in September, seasonally adjusted. The index for final demand increased 1.6% for the 12 months ended in September.

The core PPI, which excludes food and energy, was unchanged in September and is also up 1.6% from a year ago.

PPI Monthly

PPI Annual

U.S. State Unemployment Rates In September 2014

In September, the unemployment rate decreased in 31 U.S. states, increased in 8 states, and was unchanged in 11 states and the District of Columbia.

The unemployment rate is higher than a year ago in 5 states: Iowa (4.6% vs 4.5%), Wyoming (4.7% vs 4.6%), Alabama (6.6% vs 6.4%), West Virginia (6.6% vs 6.4%), and Alaska (6.8% vs 6.6%).

Recall that the national jobless rate in September was 5.9%.

State Unemployment Rates

Existing Home Sales Increase To Annual Rate Of 5.17 Million In September

Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, increased 2.4% in September to a seasonally adjusted annual rate of 5.17 million. This annual rate is 1.7% lower than the 5.26 million-unit level in September 2013.

Lawrence Yun, NAR chief economist, says the improved demand for buying seen since the spring has carried into the fall. “Low interest rates and price gains holding steady led to September’s healthy increase, even with investor activity remaining on par with last month’s marked decline,” he said. “Traditional buyers are entering a less competitive market with fewer investors searching for available homes, but may also face a slight decline in choices due to the fact that inventory generally falls heading into the winter.”

“Economic instability overseas is leading to volatility in the stock market and is causing investors to seek safer bets, which will likely keep interest rates in upcoming weeks hovering near or below where they are now,” said Yun. “This is welcoming news for consumers looking to buy, although they could temporarily become more cautious by less certain economic conditions.”

Existing Home Sales Change

The existing home sales rate in 3 of the 4 U.S. regions in September:

  • Northeast: 0.68 million from 0.67 million month prior.
  • Midwest: 1.17 million from 1.24 million month prior.
  • South: 2.12 million from 2.02 million month prior.
  • West: 1.20 million from 1.12 million month prior.

Existing Home Sales

Total housing inventory at the end of September decreased 1.3% to 2.30 million existing homes available for sale. That represents a 5.3 month supply at the current sales pace. Unsold inventory is 6.0% above a year ago, when there were 2.17 million existing homes available for sale.

Inventory

The median time on market for all homes was 56 days in September. That is up from 53 days in August. Short sales were on the market for a median of 116 days, while foreclosures typically sold in 53 days, and non-distressed homes took 59 days. 35% of homes sold in September were on the market for less than a month.

The national median existing home price for all housing types was $209,700, up 5.6% from a year ago.

Median Price

The Navy’s Autonomous Swarm

The U.S. Navy recently demonstrated its Autonomous Swarm project, a fleet of unmanned vessels designed to overwhelm an adversary.

As a large ship moved through the water, a helicopter overhead spotted an unidentified boat approaching and sent a warning to a small fleet of escort boats. Some were armed with loudspeakers, others with flashing lights, another with a .50 caliber machine gun.

Once the fleet zeroed in on the threatening vessel with radar and infrared sensors, some of the escort boats broke away and quickly encircled it. They flashed lights and blasted warnings through loudspeakers. Threat resolved.

All of the escort boats were unmanned—and yet they moved together as a group, thanks to what’s known as “swarm intelligence.”

Rising Interest Rates And Commercial Real Estate

Commercial Real Estate

While rising rates do translate into higher borrowing costs and often higher capitalization rates, which can lead to lower asset values, the notion that rising rates are categorically bad for real estate equities is somewhat overstated, and often incorrect. Rising rates tied to an improving economy, which is what we are seeing today in the U.S., can actually provide a constructive backdrop for the asset class. An improving economy typically means landlords benefit from better operating fundamentals – lower vacancy rates, higher lease rates and better acquisition/development yields.

There are numerous past periods when rates rose on the back of an improving economy and real estate performed well. In fact, during the five periods of rate increases since 2000, the MSCI U.S. REIT Index averaged a 1.2% return over the three months following the initial rate increase and a 14.7% return over the ensuing 12 months (outpacing the S&P 500 Index by more than 200 basis points).

Global Evolution a Game Changer for Real Estate
Patrick Brophy, Janus Capital Group

Industrial Production Grows In September

U.S. industrial production increased 1.0% in September after having decreased 0.2% in August. At 105.1% of its 2007 average, total industrial production in September was 4.3% above its level of a year earlier.

IP Change

Industrial Production

The output of manufacturing increased 0.5% in September, production at mines increased 1.8%, and output of utilities rose 3.9%.

Capacity utilization for total industry decreased in September to 79.3%. That is 0.8% below its long-run (1972–2013) average.

Capacity Utilization