While trying to decide if today’s economic data is actually good news, or just “less bad” news we can report the following: Initial jobless claims for the week ending September 24 dropped from 428,000 to 391,000, the lowest number of claims since April, 2011. And Gross Domestic Product (GDP) for the 2nd quarter was revised slightly higher this morning from an annualized rate of 1.0% to 1.3%. Not exactly a stellar performance, but a step in the right direction.
On the European front, the German Parliament voted this morning to support expansion of the euro zone rescue fund. Recall this fund was established with the authority to buy bonds from the market, enable bank recapitalizations, and provide precautionary credit lines. The measure also increases Germany’s stake in the fund from €123 billion to €211 billion. All 17 member countries must approve of the plan, and 11 have already done so. If I were a German taxpayer I would be thrilled to increase my tax burden to bailout my less frugal brethern to the south.
U.S. Treasuries were unaffected by today’s data and news, with the yield on the 10 year note remaining above 2.00% at 2.015%. Prices for mortgages are worse by a few basis points.
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