Jobless Claims, Producer Prices

Each day the Research staff takes a look at recently released economic indicators, addressing what these indicators mean for REALTORS® and their clients. Today’s update discusses jobless claims and the producer price index.

• Strong improvement in new jobless claims is shown in data released today indicating strength in the labor market. New claims were down 19,000 to 366,000, which is the lowest number since May 2008. The four-week average is down 6,500 to 387,750, also the lowest figure since July 2008 and continuing declining for most of the last twelve weeks. Economists generally suggest that claims below 400,000 indicate expansion of the workforce.
• Continuing claims increased 4,000 to 3.603 million for the week. Still, the four-week average is down 5,000 to 3.666 million, which is also a great improvement. Assuming new jobless claims continue to improve, NAR expects about 1.5 net new jobs in the next 12 months. Today’s data further confirms that the economy is expanding and a chance of another economic recession in 2012 has greatly diminished.
• Separately, producer prices increased some in November largely driven by increase in cost of food. The slight increase of 0.3 percent follows a 0.3 fall the month before. Energy picked up slightly, 0.1, however home heating oil prices jumped 9.4 percent. Gas was also down slightly. Increase in food costs was largely due to costlier fresh and dry vegetables, which jumped 11.5 percent. Excluding food and energy, producer prices did not change much except some slight increases from cars, light trucks and pharmaceuticals.