wmeubank@ocp.kcmo.com
NIKKO MARKET COMMENTS
Prepared by
The Nikko Securities Co. International, Inc.
Economic News
Jobless claims rose by 5,000 in the December 13 week to a level of 319,000. Total benefit recipients fell by 9,000 in the December 6 week to hold the insured unemployment rate at 1.9%. The latest set of statistics suggest no change in labor market conditions. The October trade deficit was narrower that expectations, at $9.69 billion. Most forecasters had projections for the trade deficit in the $12 billion region. A strong 2.4% rise in exports was instrumental in trimming the trade gap this month. Surprisingly, imports only rose by 0.4% despite strong domestic economic conditions. The narrowing October deficit may lead some forecasters to upgrade expectations for Q4 GDP. We continue to anticipate a 3.6% rise in Q4 Real GDP. The December Philadelphia Purchasing index plunged unexpectedly, falling to —1.3 from +10.1 last month. Components which now stand in negative territory include new orders, order backlogs, inventories, workweek and delivery time. Price measures were mixed; raw materials cost rose at a faster rate but prices received showed a slower pace of increase. The employment index rose by 8 points form —2.4 to +6.4. Despite the weak reading in this month's composite index, the area's manufacturers were more optimistic about sales prospects six months ahead. The outlook index rose from 25.4 to 38.3.
Robert A. Brusca, Chief Economist
The Nikko Securities Co. International, Inc.
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