Good News: US Economy Growing, Bad News: Very Slowly

Good News: US Economy Growing, Bad News: Very Slowly

Good News: US Economy Growing, Bad News: Very Slowly

$DIA, $SPY, $QQQ, $VXX

More Americans sought unemployment aid last week, but the number of applications remains at a low level that suggests companies are still hiring.

The surge in jobless claims is not worrisome, but trying to seasonally adjust weekly data is a pretty much impossible task, so even a few weeks of increases really mean little to the economy.

The US Labor Department says weekly applications for unemployment aid rose 21,000 to a seasonally adjusted 275,000. That is the most since June.

Applications are a proxy for layoffs, and have been below 300,000 for 94 weeks running. That is the longest streak since Y 1970. And last month, the unemployment rate fell to a 9-year low of 4.6%.

Layoffs typically rise in Winter when construction sites close and hotels and restaurants at tourist sites cut back on their staffing. The government seasonally adjusts for those trends but does not always do so perfectly.

The US economy is growing, consumers and business are spending, but strong economic growth it is not.

Lots of data were dumped Thursday and they tell largely the same story.

Consumer spending was up in November, but if you adjust for inflation, it was not special. The Key factor was a major slowdown in durable goods consumption, driven by a softening in vehicle sales.

It looks like consumption will be up moderately in Q-4 this year, and that will likely keep overall growth from getting anywhere near what happened in Q-3.

Looking forward, household incomes went nowhere. Workers are hoping that wage and salary gains will accelerate, but they actually went backward in November.

Why that happened in anyone’s guess and it will be interesting to see what the December numbers look like. At least inflation remains well contained.

On the business side, demand for big-ticket items, excluding the aircraft sector, was up solidly in November, as business capital expenditures rose sharply.

Thursday, the major US stock market indexes finished at: DJIA -23.08 at 19918.88, NAS Comp -24.01 at 5447.42, S&P 500 -4.22 at 2260.96

Volume: Trade was below average with 882.6-B/shares exchanged on the NYSE.

  • Russell 2000 +20.1% YTD
  • DJIA +14.3% YTD
  • S&P 500 +10.6% YTD
  • NAS Comp +8.8% YTD
HeffX-LTN Analysis for DIA: Overall Short Intermediate Long
Bullish (0.37) Neutral (0.19) Very Bullish (0.56) Bullish (0.35)
HeffX-LTN Analysis for SPY: Overall Short Intermediate Long
Bullish (0.38) Bullish (0.31) Neutral (0.19) Very Bullish (0.64)
HeffX-LTN Analysis for QQQ: Overall Short Intermediate Long
Bullish (0.36) Bullish (0.47) Bullish (0.25) Bullish (0.36)
HeffX-LTN Analysis for VXX: Overall Short Intermediate Long
Very Bearish (-0.65) Very Bearish (-0.60) Very Bearish (-0.67) Very Bearish (-0.67)

Stay tuned…

 

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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