In today’s early morning releases initial jobless claims rose 11,000 to 428,000 for the week ending September 10. With the four-week moving average is now up to 419,500, there are very few positive signs for the labor market out there right now which initial claims data reaffirm every week. Also released this morning, the New York Fed manufacturing index for its region dropped again from -7.7 to -8.8.
On the inflation front the August Consumer Price Index was also released this morning and showed a larger than expected increase in prices. Overall prices rose 0.4% month over month bringing the annualized pace of price growth to 3.8%. Excluding food and energy prices rose 0.2% putting the year over year core rate of inflation at 2.0%.
The last piece of data was the Fed’s Industrial production report for August which reflected an increase of 0.2% after increasing 0.9% in July.
For the most part today’s data is negative as the labor market remains in the doldrums, and excluding energy costs consumer prices are moving higher. This data was mostly ignored by the markets, though, as the news that the ECB, the Fed and other central banks around the world will cooperate to offer short term loans to European banks to prevent money markets from freezing. This news sponsored a rally in stock prices, especially financial shares, and an unwinding of the safe haven bid in U.S. Treasuries. The yield on the 10 year note is now at 2.07% and mortgage prices are worse again today by another .25%.
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