Seasonally Adjusted…

  • December 12, 2013

seasonallytoon

This time of year I feel like I am bombarded with seasonal adjustments. Retailers increase holiday staff, the scale “seasonally adjusts” for those extra few pounds and every food item suddenly has a pumpkin flavor—it’s seasonal. The same is true for the bond market – well we don’t offer a pumpkin flavor but you get the idea.  All economic indicators that effect the bond market are seasonally adjusted too. It can make a good number look like a great number or bring a great number back to reality. Today’s numbers were no exception.

  • Jobless claims were released today, just like every Thursday; it is on the regular rotation on the economic calendar. This number measures the number of people filing for unemployment benefits. Applications jumped to 368,000 last week; this large increase was cited as a seasonal abnormality. Sort of like how my cookie consumption is suddenly abnormal.
  • Historically, this number has been a market mover, a key indicator that measures the health of the economy. However, the Labor Department admitted the adjustments for seasonal employment have not worked as intended. Today when the number was released the market shrugged.
  • Investors instead responded to Retail Sales & Business Inventories, as both numbers came in stronger than expected. U.S. Retail Sales increased .7 percent, the most since June. Bond prices dropped and mortgage rates increased.

Tomorrow Producer Prices are released; economists are expecting a .1% drop in November. The big ticket items are all next week; it will give us something to look forward to—‘tis the season.

By Lindsey Fediuk, Quicken Loans Capital Markets Analyst

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