Jobless Claims Rise, Consumer Sentiment Improves

- Initial Jobless Claims for last week rose to 335K versus estimates of 312K and 305K the prior week.
- Continuing Claims rose to 2824K versus estimates of 2750K and 2765K prior.
- The Final Univ. of Mich. Consumer Confidence reading for November rose to 81.6 versus estimates of 81.0 and a prior estimate of 79.9.

BOTTOM LINE: The number of Americans filing first-time claims for unemployment benefits rose more than forecast last week, suggesting the Veteran’s Day holiday may have helped push filings down to a four-month low a week earlier, Bloomberg reported. The unemployment rate for people eligible for benefits, which tracks the US unemployment rate, stayed at 2.2%. The four-week moving-average of jobless claims rose to 323,250 from 322,000. I continue to believe the labor market will remain healthy, but fail to surpass pre-hurricane levels, which will help hold unit labor costs(the largest component of inflation) in check.

Confidence among US consumers rose this month, rebounding from its lowest level in 13 years as people paid less at the gas pump, Bloomberg said. Unleaded gas futures have now collapsed almost 50% from September highs. The current conditions component of the index, which measures Americans’ perceptions of their financial health and whether or not it’s a good time to buy big-ticket items like cars, jumped to 100.2 from 91.2 the prior month. With the economy in the middle of the longest 3%+ growth streak since 1986, I continue to believe the irrational pessimism that has permeated the consumer psyche will evaporate over the intermediate-term.