Job Market Still Healthy, Consumer Confidence Near 15-Month High, Inflation Expectations Fall

- Initial Jobless Claims for last week rose to 321K versus estimates of 310K and 309K the prior week.
- Continuing Claims rose to 2454K versus estimates of 2435K and 2440K prior.
- Final Univ. of Mich. Consumer Confidence for November fell to 92.1 versus estimates of 93.3 and a prior estimate of 92.3.

BOTTOM LINE: The number of US workers filing first-time applications for state jobless benefits increased more than expected last week, while remaining low enough to suggest little sign of weakening in the labor market, Bloomberg said. The four-week moving-average rose to 317,000 from 314,000 the prior week. The unemployment rate among those eligible for benefits, which tracks the US unemployment rate, remained at a historically low 1.9%. I continue to believe the job market will remain healthy over the intermediate-term without generating substantial unit labor costs increases.

Confidence among US consumers stayed close to a 15-month high in November as lower gas prices and more jobs helped Americans cope with the housing slowdown, Bloomberg reported. The current conditions component of the index, which gauges Americans’ perceptions of their financial situation and whether it’s a good time to buy big-ticket items, fell to 106 from 107.3. Consumers said they expect inflation of 3.0% over the next 12 months versus prior expectations of 3.1% inflation. ShopperTrak expects holiday spending to increase 5% this season. This number included the period surrounding the election. I expect consumer confidence to make new cycle highs over the intermediate-term as energy prices fall further, inflation continues to decelerate, long-term rates remain low, stocks continue to rise, housing stabilizes at relatively high levels and the job market remains healthy.