Thursday, November 30, 2006

Weak Chicago PMI, Weak Retail, and Rising Claims

by Bill McBride on 11/30/2006 11:51:00 AM

I guess we could call today "Roubini Thursday".

From MarketWatch: Chicago economy weakens further in November

Business activity in the key Chicago area decelerated to its slowest pace in more than three years in November, raising fears of a broader slowdown in the U.S. economy, according to the National Association of Purchasing Management Chicago on Thursday.

The closely-watched Chicago PMI, which measures activity in northern Illinois and parts of Indiana, unexpectedly fell to 49.9% on a seasonally adjusted basis from 53.5% in October.

Readings below 50% in the diffusion index indicate most firms that were surveyed are contracting. The regional economy had expanded for 42 straight months.
And on retail: Weak November start hurt retailers' sales
The nation's largest retailers turned in mostly disappointing sales results for November as sluggish sales at the beginning of the month outweighed a largely robust post-Thanksgiving start to the holiday shopping season.

Across the board, retailers ranging from Wal-Mart Stores and Costco Wholesale to J.C. Penney and Abercrombie & Fitch turned in weaker-than-expected numbers, according to sales reports issued Thursday.

With 48 of 56 retailers reporting, Thomson Financial said 54% had fallen short of expectations for same-store sales, the industry benchmark of growth measuring receipts rung up at stores open longer than a year.
And on claims: U.S. weekly jobless claims highest in over a year (kudos to charts for predicting the jump in claims in the comment last night!)
First time claims for state unemployment benefits rose by 34,000 to 357,000 for the week ending Nov. 25. The rise in claims is up from a revised 323,000 the prior week, the Labor Department said.
For claims, the number to follow is the 4-week moving average - currently 325K - and the key level is about 350K, possibly indicating a recession.