Free Markets, Free People
Economic Statistics for 10 Nov 11
Today’s economic statistical releases:
The trade deficit improved last month, falling to -$43.1 billion. Sadly, the improvement comes largely from gold purchases, which isn’t a sign of confidence or hope. It’s a sign of a panicked flight to safety, based on a growing financial terror about the Euro Zone. Yesterday, Barclay’s came out and said (PDF) what everyone has been fearing: Italy is going to default on its debt, and no amount of economic reform will stop it. Bye-bye, Euro. Also yesterday, as I predicted, the French and Germans are now discussing a "core" Euro zone, which would consist of…France and Germany. If Italy goes down, there’s simply no way to wall off the resulting bank failures, credit tightening, and economic contraction that will result from the evaporation of those assets. Presumably, Spain, Portugal, and Ireland will auger in shortly after Italy does, as their debt becomes impossible to service in the resulting Italian contraction. Yet, somehow, the failures of this model of political-economic policy seem lost on American policymakers.
Initial jobless claims continue to edge down, coming in at 390,000 this week. Last week’s claims were revised upwards by 3,000 to 400,000.
Export prices fell -2.1% last month, while import prices dropped -0.6%. On a year-over-year basis, export prices are up 6.3%, and import prices are up 11%.
The Bloomberg Consumer Comfort Index edged up slightly last week, though it remains near historic lows at 51.6.