Stocks are finishing the best September in 71 years with some huge buy orders this morning after a cluster of better-than-expected macro economic news:
Initial Jobless Claims
The Department of Labor said Initial Jobless Claims dropped 16,000 to 453,000 claims (versus 460,000 expected). Moreover, continuing claims dropped 83,000 to 4,457,000 claims.
Basically, Initial Jobless Claims are trading in a very tight range between 450,000 and 500,000. As we repeat like a viral retweet, the overall unemployment situation will not improve until Initial Jobless Claims fall below 400,000.
Notable Stat: The $1 billion Temporary Assistance for Needy Families program expires today. If it is not extended, this could put future pressure on Initial Jobless Claims.
Gross Domestic Product (GDP)
The Bureau of Economic Analysis said “Real gross domestic product — the output of goods and services produced by labor and property located in the United States — increased at an annual rate of 1.7 percent in the second quarter of 2010.” That’s compared to a real GDP increase of 3.7% in the first quarter.
The increase in real GDP in the second quarter primarily reflected positive contributions from personal consumption expenditures, nonresidential fixed investment, exports, private inventory investment, federal government spending, and residential fixed investment. Imports, which are a subtraction in the calculation of GDP, increased.
The deceleration in real GDP in the second quarter primarily reflected a sharp acceleration in imports and a sharp deceleration in private inventory investment that were partly offset by an upturn in residential fixed investment, accelerations in nonresidential fixed investment and in federal government spending, and an upturn in state and local government spending.
Learn More: Your Ultimate Cheat Sheet to GDP >>
Chicago Purchasing Managers Index (PMI)
The Chicago Purchasing Managers Index reached 60.4 in September (versus 56.0). Production and new orders accelerated.
Notable Stat: The Orders Backlog index fell from 56.2 in August to 49.1 (< 50 = contraction). Briefing explains, “Without a steady supply of backorders, production growth is forced to follow new orders growth. This could result in unstable production if new order demand becomes more volatile in the coming months.”