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283,000
Applications last week for unemployment aid. A drop in applications for aid is a positive sign that the economy is absorbing job seekers. Although more and more Americans are finding jobs, economists are arguing about the indicator's significance for the health of the overall economy.
Applications for US unemployment aid plummet to 283,000, AP via Yahoo Finance
Weekly applications for unemployment aid dropped by 21,000 last week to their lowest level since last October. The drop could be attributed in part to the economy adding 3.2 million jobs in the past year, helping to lower unemployment to 5.7% in January from 6.6% twelve months before. Number of people quitting jobs increased by 2.1, generally seen as a strong sign of job alternatives.
Following the lead of Gap and others, Walmart announced last Wednesday that it would raise associates' salary to $9 by this April and $10 by next year. The market responded by pushing WMT shares lower amid wage expense concerns. Investors are taking this as a sign that employment, at least at the lower end of the market, is tightening noticeably in recent weeks.
Complicating bullishness associated with recent rates of employment is the fact that, at 3.6%, job vacancies in December were at their highest rate since 2001--well before the recession. Analysts are taking this as a sign that many employees are not well matched to the jobs currently available. Productivity has grown at just 1.3% per year since 2007, the slowest rate of increase since 1970.
Lenders Step Up Financing to Subprime Borrowers, WSJ
Lenders Step Up Financing to Subprime Borrowers, WSJ
Almost four out of every 10 loans for cars, credit cards, and personal borrowing in the first 11 months of 2014 went to borrowers with FICO credit scores of 650 or less, or "subprime borrowers." These loans carry higher returns for investors, but also a greater chance of default. Autos, as opposed to credit cards or personal loans, are easier to cover because vehicles can be repossessed by lenders.
Fed Tiptoes into Rate Hike Debate, WSJ
The debate about when the Fed will raise interest rates continues, as Janet Yellen and her advisors remain extremely cagey about changing the wording used in FOMC minutes to give indications to markets either way--about a nearer-term or longer-term increase. One thing is clear--despite strong growth in jobs numbers, inflation is not yet at a level that the Fed would like it to be.
Fed Tiptoes into Rate Hike Debate, WSJ
The debate about when the Fed will raise interest rates continues, as Janet Yellen and her advisors remain extremely cagey about changing the wording used in FOMC minutes to give indications to markets either way--about a nearer-term or longer-term increase. One thing is clear--despite strong growth in jobs numbers, inflation is not yet at a level that the Fed would like it to be.
Vocabulary:
Economic Calendar:
Economic Calendar:
- Mn Feb 23: Existing home sales, Dallas Fed Mfg survey; CHGG, HSBC, SF
- Tu Feb 24: Case-Shiller HPI, Consumer confidence; ; SAM, FSLR, FLTX, HD, ODP
- We Feb 25: New home sales, Janet Yellen speaks; CVC, CPB, DLTR, LOW, PLKI, TGT
- Th Feb 26: CPI, Durable goods, Jobless claims; BUD, GPS, JCP, LYV, RBS, SRE
- Fr Feb 27: GDP, Chicago PMI, Pending home sales
Predictions from last week: 2 / 3 All-Time: 12 / 18
- Chinese yuan weakens: WRONG
- Dow, S&P continue record highs :CORRECT
- Manufacturing expands: CORRECT
- Yellen keeps "patient" wording in FOMC dialogue
- CPI less food and energy at 0.0%, below consensus
- GDP on Friday indicates annualized rate of over 3.5% economic growth
Participants: J. O'Brien, K. Meenan
