(CEP News)
• U.S. Continuing Jobless Claims Soar to New Record High
• Philly Fed Survey Falls to 19-Year Low
• Obama, Harper Say NAFTA, Trade Important

U.S. Continuing Jobless Claims Push Higher to All-Time High

Initial jobless claims were unchanged at 627k in the week, from an upward revision to the previous week’s claims to 627k, according to the U.S. Department of Labor. Claims were forecast to come in at 620k.

However, continuing claims rose to a new record high level of 4.987 million in the week ending Feb. 7, above the consensus forecast for a rise to 4.830 million. The prior week’s level of 4.810 million was revised up to 4.817 million.

Philadelphia Fed Survey Crashes to 19-Year Low

The Philadelphia Federal Reserve Bank’s manufacturing survey fell to -41.3, its lowest reading since October 1990. Forecasts had been for a -25.0 reading following January’s -24.3 reading. The index has been negative for 14 of the past 15 months, a period that corresponds to the current recession, the report noted.

The employment index hit an all-time low of -45.8 from -39.0 as the U.S. economy lost more than 200,000 manufacturing jobs in January. The new orders index fell to -30.3 from -22.3, while shipments fell 16 points to -32.4 - its lowest reading since the survey began in 1968.

President Obama Promises to “Deepen and Renew” Co-operation with Canada

During his first foreign trip as president, Barack Obama pledged to work closely with Canada and maintain an open dialogue between the two countries. Obama said the U.S. and Canada must “deepen and renew” their co-operation on a host of issues, and suggested today’s meeting with Prime Minister Stephen Harper was the first step in opening the dialogue between the two countries.

When asked about the possibility of reopening the North American Free Trade Agreement, which he had alluded to during his election campaign, Obama said, “Now is a time where we have to be very careful about any signals of protectionism.” He also stressed the need to grow trade and not contract it, and said there is nothing in the U.S. stimulus package that is “adverse to that goal.”

Fed’s Lockhart Says Bank Nationalization Off the Table

Speaking to reporters after a speech in Alabama, Federal Reserve Bank of Atlanta President Dennis Lockhart said nationalizing banks is “substantially” off the table. Lockhart said he was “unaware” of any serious consideration of bank nationalization. Earlier in the day, bank stocks plunged on fears of the U.S. government taking control of banks, which could harm shareholders.

Lockhart also said correctly valuing assets is a central challenge to fixing banks and that the Treasury is not ruling out guarantees of toxic assets.

U.S. Producer Prices Rise Beyond Expectations

U.S. producer prices climbed above expectations in January, with gasoline prices pushing up headline PPI. Headline PPI grew 0.8% month-over-month, against expectations for a 0.3% jump and following the 1.9% fall in December.

The headline figure was pulled upward by a sharp 15.0% increase in gasoline prices for the month, after a 26.2% drop in gas prices the month prior.

Ex-energy and food, PPI grew by 0.4% monthly, following a 0.2% jump in December. Economists had expected a 0.1% increase.

Crude Oil Inventories Fall for First Time in Five Weeks

U.S. crude oil inventories fell for the first time in five weeks, despite forecasts for an increase, the U.S. Energy Information Administration reported Thursday.

Crude oil inventories fell by 138,000 barrels in the week ending Feb. 13. Analysts were expecting inventories to show another build of over 4 million barrels.

U.S. Natural Gas Inventories Fall 24 Bcf

Underground U.S. natural gas storage declined by 24 billion cubic feet last week, but the supply remains well above last year’s average, according to the U.S. Energy Information Administration.

The decline in storage was well below the consensus of -50 Bcf and was also smaller than last week’s reported withdrawal of 159 Bcf.

U.S. Leading Indicators Post Surprise Gain in January

The index of U.S. leading indicators rose above expectations in January, posting a 0.4% month-over-month gain, according to the Conference Board. The consensus had forecast a flat reading. December’s increase was revised down to 0.2% from 0.3%. Over the past six months, the leading index has fallen 3.7%.

Resale Home Prices in Canada to Drop 5% in 2009, CMHC Says

A fall in activity due to the economic downturn will continue to put downward pressure on house prices in Canada for the remainder of the year, the Canada Mortgage and Housing Corporation said on Thursday.

Housing starts are expected to drop a whopping 31.7% in 2009 to 160,250 units, much lower than the 211,056 units reported in 2008. For 2010, CMHC expects a marginal pickup in activity to 163,350 units. Things should turn around next year, CMHC says, as the level of MLS sales is expected to increase by 9.3% to 405,000 units in 2010.

By Ernest Hoffman, ehoffman@economicnews.ca and Stephen Huebl, shuebl@economicnews.ca, with contributions from Megan Ainscow, mainscow@economicnews.ca and Neils Christensen, neilsc@economicnews.ca, edited by Sarah Sussman, ssussman@economicnews.ca

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Posted in Categories: Canada, Economy, Releases, USA.

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