Jobless Claims Still Low, Wholesale Inventories Fall, Energy Inventories Fall Less Than Estimates

- Initial Jobless Claims for last week fell to 319K versus estimates of 315K and 320K the prior week.
- Continuing Claims fell to 2593K versus estimates of 2582K and 2598K prior.
- Wholesale Inventories for July fell .1% versus estimates of a .6% increase and a .4% gain in June.
- The EIA reported crude inventories fell 6.45 million barrels vs. estimates of a 7.7 million barrel fall. Gasoline inventories fell 4.3 million barrels vs. estimates of a 6.25 million barrel decline. Distillate inventories fell 816,000 barrels vs. estimates of a 1.9 million barrel decline.

BOTTOM LINE: The number of Americans filing first-time claims for jobless benefits fell to 319,000 last week, as people thrown out of work by Hurricane Katrina weren’t able to apply for benefits, Bloomberg said. According to the CBO, Hurricane Katrina may cost the US economy 400,000 jobs this year. The four-week moving average of jobless claims rose to 318,500 from 316,500 the prior week. The insured employment rate, which tracks the US unemployment rate, was unchanged at 2%. I expect initial jobless claims to begin spiking next week as Katrina victims are able to file.

Stockpiles at US wholesalers unexpectedly fell in July for the first time in more than a year, led by a drop in supplies at computer-equipment, metals and pharmaceutical companies, Bloomberg said. Drug stockpiles fell 4.9%, the most on record. The inventory-to-sales ratio fell to 1.18 months, the lowest since April. Inventories should begin increasing again as port problems in Louisiana improve.

The energy inventory data is not nearly as bad as feared. As well, AAA is saying that gasoline demand has “fallen off a cliff” over the last week.