More signs that the boost to US employment in August was merely a blip on the screen came in today, ahead of tomorrow's penultimate employment reports. Initial claims for unemployment continued to fall, but at a slower rate than anticipated. Applications fell 4,000 to 570,000 last week. Continuing claims rose by 92,000 in the week ended Aug. 22 to 6.23 million, however. In the all-important service-sector (from the point of view of employment), however, the pace of the business activity decline slowed, but remained in depressed territory. So the data remain uncomfortably mixed, with the outlook bias stuck in discernably negative territory. Tune in tomorrow at the same bat time for the big news to get a clearer picture (and even then...).
The Washington Post reports today that the US will need "massive" hiring" to fill mission-critical posts in the next three years. But the number given, 270,000, represents a little more than the offset on one GOOD month's losses during this recession, so it's not like it's going to make much of a difference, especially over three years, as unemployment is slated to persist at more than 8 percent levels beyond 2011.
Retail sales numbers came in, and confirm a contunuing trend toward success for low-end stores at the expense of those catering to fashion addicts. But the data are unusual because the important back-to-school numbers are truncated due to the lateness of the Labor Day holiday next week (which aren't included, for obvious reasons).
The Financial Times reported yesterday (I forgot to post this then, and I'm piggybacking on Morningstar--thanks--for this link) that insider selling on Wall Street soared in August, in yet another sign that the summer equity rally had little substance to it (beyond huge rises for the like of AIG, Fannie and Freddie, Citi, etc., and indications that short-sellers were engaged in panic-buying to cover bets gone bad, for starters). And it's funny: whereas, during the "green shoots" days, stocks moved up with every report that wasn't a disaster, now even better news is being greeted with frostiness from investors. But bonds continue to stay with stocks at relatively advanced levels, at least if you're not in China. And stocks rose there for the third straight day, at an impressive 4.8% clip (losses from Monday's dive were 2 percentage points more), on assurances from a Chinese regulator that markets were functioning despite all the hoopla about gazillions of yuan of loans being cut off and whatnot. In Japan, howver, the Nikkei index was down because of strength in the yen (which serves as something of a safety valve when temporary or slight weakneses in the US--like a poor jobs report--surface). Also, China is bracing for another bout of instability in the west.
Finally, the European Central Bank left its key interest rate at one percent, in a move that surprised only those who perhaps never knew that a Europen Central Bank ever existed. A far more interesting development will take place in two developed-country central banks, Norway's and Australia's, in the next few months. These countries, having chalked up impressive growth (both on rising natural resource prices, and Australia on super-stimulus enabled Chinese growth), are saying they will begin to extricate themselves from their "quantitative easing" programs in the next few months. You'd better believe that the folks at the Fed, the Banks of Japan and England, and the European Central Bank will be watching to see how messy an affair this could be.