Important developments today:
1. Initial unemployment claims stabilize below the 450,000 mark
2. Slump in aircraft orders drag durable goods orders down
3. Consumer spending which accounts for 70% of US GDP, rose by 0.4% in November
Initial unemployment claims stabilize below the 450,000 mark. The U.S. Labor Department reported today that initial unemployment claims fell by 3,000 to a seasonally adjusted 420,000 for the week ending December 18th. The four-week moving average, which gives a better idea of trends, was up by 2500 to 426,000 –which is still one of the lowest levels in over two years [see Chart at http://gem or http://www.worldbank.org/gem]. The improvements observed in the initial claims report for December could translate into a better employment report for December. Last month’s Labor Department employment report pointed to difficulties in the jobs market as the unemployment rate edged up to 9.8% from 9.6%, even though the private sector added some 50,000 jobs. Some analysts believe that initial unemployment claim figures of less than 400,000 is more consistent with an upswing in hiring and a fall in unemployment.
Slump in aircraft orders drag durable goods orders down. Excluding transportation equipment, which is volatile, new orders for US durable goods increased by 2.4% (m/m) in November – the highest increase in 8 months. Orders for computers and electronic products rose by 5.8% while machinery orders were up by 0.5%. However, largely due to a 53.1% slump in commercial airplane orders, overall durable goods orders fell by 1.3% in November. Not with standing this, the recovery in US manufacturing activity is poised to continue as the latest Purchasing Managers Index (PMI) is at 56.6, thereby pointing to continued expansion. Further, today’s release by the Commerce Department shows that unfilled durable goods orders, a sign of future demand, was up by 0.4%.
In other US economic news, consumer spending which accounts for 70% of US GDP, rose by 0.4% in November, while personal incomes rose by 0.3%. The savings rate slipped to 5.3% from 5.4% in October, well below the high of 6.3% recorded earlier this year. This may signal increased consumer confidence in the US recovery. Indeed, retail sales have been up for 5 consecutive months to November.
Among emerging markets
In Sub-Saharan Africa, In Kenya, Q3 GDP grew by 6.1%, up from 0.5% in the same period last year. The Kenya National Bureau of Statistics noted that the economy was recovering due to good rains, increased liquidity and prudent macroeconomic management. The average growth rate for the first three quarters has been 5.4% compared with 2.1% and 2.3% in 2008 and 2009 respectively.
Business confidence in Namibia rose to a record high in November, supported by recent interest rate cuts. According to a survey published by the Institute of Public Policy Research, its business climate monitor index climbed by 9.8 points to 136.7. However, the survey also pointed to the reluctance of consumers to borrow, inspite of the lower interest rates.
Zambia’s 2010 revenue collection is expected to exceed its target by 9% due to increased tax collections from mining companies and domestic tax arrears, according to a statement by Zambia’s Finance Minister, Situmbeko Musokotwane.