January 13, 2011
A major and unpredicted jump in jobless claims raises the unfortunate question whether momentum in the jobs market, or what momentum there is, may already be fizzling. Conclusions, impossible to draw because of unusual year-end factors affecting the data, will have to wait for next week's report.
Strength in exports and softness in vehicle imports and imports of consumer goods made for an improvement in the November trade deficit and is raising the outlook for fourth quarter GDP. Producer price data show pressure for energy as well as for food prices which have been showing new pressure this week following major draws in grain stocks. Barclays is warning that food inflation will be a growing problem for global policy makers.
Another successful auction, this time for Spain, drove the euro higher and the dollar lower with the dollar index down one percent to 79.23. The Dow slipped fractionally to 11,731. Commodities softened with oil down nearly one percent but still over $92. Gold also lost nearly one percent, ending over $1,370.