Economy Watch: Initial Jobless Claims Lower Than Expected; Manufacturing Biz Conditions Improve in January; Miles Driven Edge Up

By Dees Stribling, Contributing Editor

Initial unemployment claims were down for the week ending Jan. 19 to 333,000, a decrease of 5,000 from the previous week, according to the U.S. Department of Labor on Thursday. The less-volatile four-week moving average was down 8,250 to 351,750. That was the lowest four-week average since early 2008, before the worst of the recession.

Separately, the Conference Board said on Thursday that its Leading Economic Index for the U.S. rose 0.5 percent in December to 93.9 (2004 = 100), following no change in November, and a 0.3 percent increase in October. The organization’s Coincident Economic Index increased 0.2 percent in December to 104.9, while its Lagging Economic Index increased 0.7 percent in December to 117.5.

“The latest data suggest that a pickup in domestic growth is now more likely, compared to a few months ago,” Ken Goldstein, an economist at the Conference Board, said in a statement. “Housing, which has long been a drag, has turned into a positive for growth, and will help improve consumer balance sheets and strengthen consumption.”

Manufacturing Business Conditions Improve in January

The Markit Flash U.S. Manufacturing Purchasing Managers Index, which was released on Thursday, noted a strong improvement in manufacturing business conditions nationwide during early January. The index rose to 56.1 in January (based on data collected from Jan. 11-23), up from 54 in December. That was the strongest rate of growth since March 2011, according to Markit Economics.

Among other things, manufacturers reported a further rise in production levels during January. The rate of output growth quickened for the fourth month running, with the latest increase the strongest since last March. Companies attributed faster output growth to an increase in new orders. Overall incoming new work rose at the fastest rate since May 2010, largely reflecting higher demand in the domestic market (since neither Europe nor East Asia are buying manufactured goods quite as robustly as before).

Markit is a global financial services company that has been collecting monthly PMI data in the U.S. since 2004. The company’s total U.S. manufacturing PMI survey panel comprises over 600 companies.

Miles Driven Edge Up
The Department of Transportation reported on Thursday that travel on all U.S. roads and streets was up by 0.8 percent (1.9 billion vehicle miles) for November 2012 compared with the same month a year earlier. Travel for the month is estimated to be 238.8 billion vehicle miles: about 750 miles for each man, woman and child in the country.

The cumulative estimate for vehicle miles for all of 2012 is about 2.7 trillion miles. As an economic indicator, vehicle miles is indirect but informative. After a dip at the onset of the Great Recession back below 3 trillion cumulative miles, the total has drifted sideways since then — much like the slowly recovering economy.

Wall Street ended Thursday mixed, with the Dow Jones Industrial Average up 46 points, or 0.33 percent, and the S&P 500 essentially breaking even. The Nasdaq dropped 0.74 percent.