MNI DATA ANALYSIS: US Jobless Claims -2k; Core Prices +0.2%>

--Four-Week Moving Average +2,250 To 242,250; Could Fall Next Week

--Core Prices Move Up To 1.4% Y/Y Rate Ahead of Dec FOMC Meeting

By Kevin Kastner and Holly Stokes 

     WASHINGTON (MNI) - Initial claims U.S. state unemployment benefits 

fell by 2,000 to 238,000 in the November 25 holiday week, only slightly 

below the 240,000 level expected, data released by the Labor Department 

Thursday showed. 

     Released at the same time, the core PCE price index rose 0.2% in 

October following an upward revised 0.2% gain in September. That upward 

adjustment in September put the year/year rate at 1.4%, where it stayed 

in October. 

     With core prices starting to creep up and initial claims for 

unemployment hovering marginally above decades-low levels, the FOMC will 

have much to discuss at its December meeting. 

     Personal income rose 0.4% in October, compared with a 0.3% gain 

expected. At the same time, nominal PCE was up 0.3%, as expected. 

     Durable goods spending fell by 0.1% after a 2.9% jump in September, 

as the hurricane effects on vehicle sales diminished. Nondurable goods 

spending rose 0.2%, while services spending was up 0.3%. 

     For income, there were gains reported for all of the major 

categories, though with a slower pace of growth for proprietors' income 

and transfer receipts. Wages and salaries rose 0.3% despite the flat 

reading for hourly earnings. 

     Disposable personal income rose 0.5% in the month, strongest gain 

since February, while real disposable income was up 0.3%. The saving 

rate partially rebounded to 3.2% in October from 3.0% in September, 

which was the lowest point since December 2007. 

     The overall PCE price index was up only 0.1% in October following a 

0.4% gain in September. The year/year pace slowed to 1.6% from 1.7% in 

the previous month, but remained above the 1.4% year/year gains seen in 

June, July, and August. 

     Real PCE rose 0.1% in October following a 0.5% gain in September. 

After inflation adjustment, durable goods PCE were still down 0.1%, 

while nondurable goods PCE rose 0.5% and services PCE was flat. 

     The October real PCE level was up only 1.7% at an annual rate from 

the third quarter average. Real PCE was up 2.3% in third quarter based 

on the GDP data released Wednesday, so the fourth quarter did not start 

out solidly despite the strong lead in from September. 

     The four-week moving average for initial claims, a better measure 

of the underlying trend of the data, rose by 2,250 to 242,250 in the 

November 25 week as the 229,000 level in the October 28 week rolled out 

of the equation. 

     If the number of headline claims does not change next week and 

there are no revisions to data from the past four weeks, the four-week 

average will fall by 250 as the 239,000 level in the November 4 week 

rolls out of the calculation. 

     The Labor Department reported that backlogged claims filings in 

Puerto Rico continued to be processed, while claims in the Virgin 

Islands "continue to be disrupted." Unadjusted claims in Puerto Rico 

totalled 2,965 in the current week after 6,972 in the previous week, 

though the shorter workweek may have had some role in that decline. 

     Seasonal adjustment factors had expected a decrease of 17.7%, or 

48,707, in unadjusted claims in the holiday-shortened week. Instead, 

unadjusted claim fell by 50,760 to 224,208, so the current week's level 

was well below the 249,774 level a year ago. 

     The level of continuing claims rose by 42,000 to 1.957 million in 

the November 18 employment survey week, up from 1.900 million in the 

October 14 employment survey week.

     The data suggest some deterioration from the mid-October survey 

week, both for initial claims and continuing claims, a negative for 

payrolls. 

     Unadjusted continuing claims fell by 110,981 to 1.613 million in 

the week, keeping the level well below the 1.746 million level a year 

earlier. The four-week moving average for continuing claims rose by 

18,250 to 1.911 million. 

     The seasonally adjusted insured unemployment rate held steady at 

1.4%, down from 1.5% in the same week a year earlier. 

     The unemployment rate among the insured labor force is well below 

that reported monthly by the Labor Department because claims are 

approved for the most part only for job losers, not the job leavers and 

labor force reentrants included in the monthly report. 

     ** MNI Washington Bureau: 202-371-2121 ** 

[TOPICS: MAUDS$,M$U$$$,MAUDR$]