Better Claims And Lower Trade Deficit Put September NEW QE Announcement In Jeopardy

Tyler Durden's picture


The surprising economic beats, even as Europe and now China slide, continues, following better than expected initial claims, which were released early as someone broke the news embargo, and trade deficit data. In the week ended August 4, 361K people filed initial jobless claims, lower than the upward revised 367K, and below expectations of 370K. This is the 5th week out of 6 in which claims have beat expectations, and heading into the September FOMC meeting, especially in the aftermath of the "blistering" August NFP report, any hope that the Fed will do anything forceful can now be taken off the table. Continuing claims rose by 53K from 3,279K to 3,332K. Adding to the economic tailwind was the June trade deficit, which narrowed by 11% in June, down to $42.9 billion from $48.7 billion, and well below the expected print of $47.5 billion, down on sliding energy prices (back in June - as a reminder crude has soared 20% since then). The reason was a 0.9% rise in exports and 1.5% drop in imports. As Bloomberg observes, "this is likely the last report that shows the narrowing of the deficit this quarter." Finally, perhaps the most notable move that will pass largely unobserved is that in the week ended July 21, a whopping 127K dropped off extended claims, which means no more free $400 weekly checks, and a corresponding hit to iGadget purchases and retail sales.

Claims have beaten 5 of the last 6 weeks now...


and the deficit is the lowest since Dec 10...

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Thu, 08/09/2012 - 08:47 | 2690510 101 years and c...
101 years and counting's picture

beats?  who cares if they "beat".  during the 2008 recession, typical weekly claims were 320k (before the Fed sent LEH into BR).  we're still 11% higher than during the recession!!!

Thu, 08/09/2012 - 08:56 | 2690551 malikai
malikai's picture

Welcome to Prosperity 2.0.

Thu, 08/09/2012 - 09:13 | 2690604 Stock Tips Inve...
Stock Tips Investment's picture

It is normal for a few weeks see some good numbers and other weeks we see bad numbers. Do not forget that our economy faces a difficult situation. But while we have an economy manipulated. It's as if they were confronted two opposing forces: reality and fiction. At the end of the day, we know who won.

Thu, 08/09/2012 - 08:53 | 2690515 Voltaire
Voltaire's picture

But but but...wasn't the NFP just statistical aerobatics? QE is definitely still on the table and will be till it won't anymore. That is after the FOMC meeting. 


But then there is the next FOMC meeting and the next after that. Just buy the fuckin dips. 

Thu, 08/09/2012 - 09:11 | 2690595 101 years and c...
101 years and counting's picture

there is no QE, no LTRO, no chinese easing.  if there was, why dont they just do it instead of talk about it? 



Thu, 08/09/2012 - 08:48 | 2690517 govttrader
govttrader's picture

So lets see..there were 7000 fewer than expected layoffs...but 50,000 more unemployed can't find jobs than expected...yeah...everything's fine

Thu, 08/09/2012 - 08:49 | 2690519 john_connor
john_connor's picture

Que Hilsenrath announcement in 3...2...1....

Thu, 08/09/2012 - 08:50 | 2690520 SheepDog-One
SheepDog-One's picture

Dumping the paraplegic economy out of the wheelchair on the start line of the NYC marathon, now RUN like the WIND! YAY!

Thu, 08/09/2012 - 08:54 | 2690536 monopoly
monopoly's picture

Why am I not impressed. Something smells here. And am certain it has nothing to do with politics.

Thu, 08/09/2012 - 08:55 | 2690540 LoneStarHog
LoneStarHog's picture

Claims? A burning structure slowly runs out of combustable fuel. Positive? Duh!

Trade? No jobs so less gas consumption and good import numbers require good retail sales. Duh!

But don't worry because Obozo is upset that his wifey does not collect a salary as First Lady (misnomer)

Thu, 08/09/2012 - 08:55 | 2690545 lolmao500
lolmao500's picture

So what. Even if there were 500k new jobs per month it still wouldn't fix all the corruption and ponzi scheme economics.

Thu, 08/09/2012 - 08:58 | 2690559 dannyboy
dannyboy's picture

SNP to get owned.. positive data = negative market.

Proper broken market is broken.

Thu, 08/09/2012 - 09:12 | 2690597 SheepDog-One
SheepDog-One's picture

Yea it may take a few more trading days before realization sinks in to hockey-helmeted indexes that this is pretty much as good as its ever going to semi trucks pulling up loaded with monies or dropped from the sky...the party is over the degenerate binge drinkers just havent realized it yet.

Thu, 08/09/2012 - 09:01 | 2690564 mrktwtch2
mrktwtch2's picture

mean while..we trade in a directionless market..cant seem to get spx above 1405 here and the longer it doesnt get through it ..the more likely a 3 to 5% downmove is coming..

Thu, 08/09/2012 - 09:04 | 2690569 SheepDog-One
SheepDog-One's picture

Good news! After a 5% downmove, think of all the space freed up for more HOPE!

Thu, 08/09/2012 - 09:04 | 2690566 Monedas
Monedas's picture

Window dressing, mojo theatre to make Obama look like a winner for at least a week prior to election day !

Thu, 08/09/2012 - 09:06 | 2690577 orangegeek
orangegeek's picture

Markets inch higher on thin volume.


Usually a significant sign of a turn.

Thu, 08/09/2012 - 09:15 | 2690612 kaa1016
kaa1016's picture

When will people get this. There will be no more QE. Bernanke and Draghi have learned that the tool that's even more powerful than doing QE is talk of doing more QE. They are playing people every time they open their mouths and it works every single time. When it stops working, even actual QE will not stop the freefall. 

Thu, 08/09/2012 - 09:56 | 2690816 LooseLee
LooseLee's picture

This 'talk' works exceptionally well on brain-dead, soul-wanting sychphant bull-tard equity idiots who have no intellectual capacity to see the simplicity of "what-is"---that being the current reality that is unfolding in front of us. Those who live in the fantasyland of "what should be" (or, 'hopium' as it is commonly referred to here on ZH) will push this market until "what-is" unleashes its powerful 'truth' on them and they have no choice but to "follow" the other intellectually bankrupt down the slope of hope...

Thu, 08/09/2012 - 09:17 | 2690618 adr
adr's picture

Economic data for the US will sho progress when they want to send the market up, and will deteriorate when they want to send the market down. It seems odd that US data beats when Chinese data doesn't, that is until you realize that the numbers don't actually track anything.

The data beats are meant to engineer buying and selling oportunities to create cover for the giant money laundering scam caled the stock indexes.

Data was created to push oil down to $80, and data was created to push it back up to $95. If you were on the right side of those trades, you could make a fortune. In fact in this crazy up and down market, you can make an immense fortune being on the right side of trades. More than going long hoping the market always goes up.

The people making up the data can always be on the right side. I don't believe any report even contains 1% truth.

Thu, 08/09/2012 - 09:17 | 2690621 LawsofPhysics
LawsofPhysics's picture

"beating expectations" - yes, all the way down.

Thu, 08/09/2012 - 09:25 | 2690664 valley chick
valley chick's picture

OT:  and the BDI continues to fall...down to 790.

Thu, 08/09/2012 - 09:29 | 2690685 insanelysane
insanelysane's picture

Like the cartoon in the server room says, "We expect so little......................and boy do we get it."

Thu, 08/09/2012 - 09:34 | 2690687 bigwavedave
bigwavedave's picture

127,000 newly pissed off poor people with guns. Perfect. FBI is gonna be busy. Just out of interest. Do you think these 'names' would be cross checked and flagged for new gun or ammo purchases? Seems like a trivial SQL job. Would you buy a Glock with your last 'paycheck'?

Thu, 08/09/2012 - 09:34 | 2690714 William Finn
William Finn's picture

I haven't seen any studies on this, but my guess is that a lot of the alleged "new jobs" created last month, are quasi-government jobs, even though they show up in the private sector.  My thinking is that with all of the relentless and mindless regulation being inflicted on businesses that if a job shows up in the transportation industry, it does not necessarily mean it is a productive driver transporting goods.  It is more likely to be a compliance guy, a lawyer, etc.  The same applies to about every industry now that the government has inserted itself in every nook and cranny of every type of business.

This dawned on me first hand when a firm I work with let two revenue producers go and replaced them with a compliance director and in house counsel BECAUSE THEY HAD TO.  So while everyone is aware that a job in the government sector has to be supported by a dollar earned in the private sector or borrowed from those who pay taxes, a very real offshoot of this regulation is that companies are now internally attriting off those working to earn revenue with those who monitor the earning of revenue.  

Has anyone seen any numbers on whether this is a trend or is it just unique to this firm?

Thu, 08/09/2012 - 09:38 | 2690728 bigwavedave
bigwavedave's picture

This is a very good point. I bet STAN will let go 5000 people, close branches and hire some PR and Lobbyist types. Would make an interesting dataset.

Thu, 08/09/2012 - 09:38 | 2690729 eclectic syncretist
eclectic syncretist's picture

What are we exporting?  Gold to China?

Thu, 08/09/2012 - 09:45 | 2690756 Dareconomics
Dareconomics's picture

There are two reasons to do something, a good reason and the real reason. The Fed needs to keep the stock market high, but it cannot simply print money for no reason (yet). Therefore, it looks to its dual mandate of stable inflation and low unemployment to justify its real action. With decent employment numbers being released week after week with potential inflation around the corner due to higher energy bills and food cost, it does not have the political cover to print more, i.e. a good reason.

Thu, 08/09/2012 - 09:59 | 2690830 khakuda
khakuda's picture

The next couple months will be telling.  I agree with you, but have no doubt they will come up with another excuse like, "Oh, well the 10 year bond has gone up 25 basis points from the bottom and that is impacting mortgage rates and threatening the housing recovery, so we needed to act."  Nevermind that their talk of QE caused the yields to rise.

The fact that they've changed the inflation bogey from CPI to core CPI  and now to PCE to minimize inflation stats, all the while changing the calculations tells you they are just dying to create excuses to print.

Thu, 08/09/2012 - 10:45 | 2691054 covert
Thu, 08/09/2012 - 11:52 | 2691326 Renewable Life
Renewable Life's picture

Politics, politics, politics!!!!!

But I can't wait to see what happens when these idiots get back from the Hamptons and Cape Cod, and realize their crack dealer is out of supply until at least November!!!

Sept and October will be wild!!!!

Thu, 08/09/2012 - 16:15 | 2692106 TheFinancialist
TheFinancialist's picture

Credit Suisse Chief Economist Neal Soss says if there is a QE3 it could range between $300 and $500 billion. But like you he believes positive data lessens the chance for more monetary actions:


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