Today's Economic Data Highlights

Today's calendar has initial claims, productivity and costs, the January services ISM, factory orders for December, Bernanke's speech at the National Press Club and a weekly Fed Balance Sheet update. $7-9 billion 10 Year POMO - will it come at yesterday's massive S/A ratio? No 56-Day CMB auction today, means major excess liquidity influx.

8:30: Unemployment insurance claims….another mean reversion?  Last week’s initial claims figure was apparently distorted to the high side by poor weather, according to a Labor Department spokesman.  Analysts look for a reversion to a level much closer to the average of recent weeks.
For initial claims, median forecast (of 52): 420k, ranging from 354k to 442k; last 454k.
For continuing claims, median forecast (of 15): 3.95 million, ranging from 3.9mm to 4.005mm; last 3.991mm.
 
8:30: Productivity and costs for Q4…a modest increase.  The preliminary estimate of 3.2% annualized growth in the fourth quarter contained an even larger 4.5% increase in nonfarm output.  We estimate hours worked rose at a 2%.  Compensation rose less than output, implying a decline in unit labor costs.
Median forecast (of 66) +2.0%, ranging from +0.4% to +3.0%; last (Q3) +2.3%.
Median forecast (of 61) +0.2%, ranging from -1.5% to +2.2%; last (for Q3 prelim) -0.1%.
 

10:00: ISM nonmfg index for Jan…will it improve?  Its manufacturing counterpart was exceptionally strong this month, and both we and the median forecaster expect this survey to hold steady in strong territory.  Ahead of tomorrow's payroll report, the employment index will be of particular interest, given generally encouraging labor market data (including a surge in the manufacturing employment index).
Median forecast (of 73): 57.1, ranging from 54.5 to 62; last 57.1. 
 
10:00: Factory orders for Dec….a small setback?  The durable goods portion of this report is already known and was down 2.5% in December, hence forecasts for a decline in the overall orders measure.
GS: -1.0%; median forecast (of 67) -0.5%, ranging from -1.5% to +2.0; last +0.7%.
 
13:00: Federal Reserve Chairman Ben Bernanke speaks…at the National Press Club.  With the last Fed statement making clear that QE2 is essentially on autopilot at this stage, markets will likely focus on any differences in tone with respect to the economic outlook and any hints about the likely procedure and timing for winding down the asset purchase program (will it be tapered?  will the Fed continue to reinvest maturing assets to keep its balance sheet stable after QE2 is completed?  Is QE3 a serious possibility in the Chairman's mind?).
 
16:30: Federal Reserve balance sheet….With QE2 underway, the Fed's balance sheet remains in expansion mode through midyear.

Via GS and ZH