Initial Claims Plunge: QE4EVA Ending Sooner Than Expected?

The economic data dump trifecta has been released, with updates on claims, retail sales and PPI. The end result was a nearly even beat/miss split.

  • Initial Claims dropped 29K from the upward revised 372K, down to 343K, beating the consensus of 369K. Needless to say, this comes at a bad time for the market when in the aftermath of yesterday's Bernanke conference, this better than expected number brings us one day closer to the end of QE4EVA. Unclear how much of this is merely the overshoot to the seasonal adjustments resulting from the fudging that happened during Sandy. Remember: all claim numbers are still largely distorted due to the impact of the Hurricane, which means that yes, the surge is indeed, Sandy's fault.
    • Of note in the claims number was the surprising surge in those claiming Emergency Unemployment Comp, which jumped by a whopping 186K, and the stunning jump in State employees claiming benefits, which jumped by a ridiculous 480K! All Sandy's fault too?
  • Retail Sales were a miss at the headline level, printing at +0.3%, and missing expectations of +0.5%. This was driven once again by a 1.4% rise in auto dealers (one assumes this excludes channel stuffing). The number was modestly better at the internal level with the Retail Sales less autos printing as expected 0.0%, and unchanged from last month. Finally, ex-autos and gas, sales rose 0.7%, beating expectations of 0.4%, driven entirely by a 3.0% surge in sales at non-store retailers in the aftermath of Hurricane Sandy.
  • Finally, Producer Prices in November dropped 0.8%, below expectations of a -0.5% decline, driven by a slide in food and gas prices. Ex-food and gas, PPI rose 0.1%, just as expected.  November PPI ex-food and energy rose 2.2%, also in line with expectations.

In short: data which on the surface may indicate the Fed's easing is ending far sooner than even we expected yesterday.

Initial Claims...


Emergency Unemployment Claims jumped the most since July 2010...


Advance retail Sales...


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