Extended Unemployment: Initial, Continued and Extended Unemployment Claims August 25 2011

Today’s jobless claims report showed an increase to initial unemployment claims and a decline to continued unemployment claims as a recent rising trend was called firmly into question for initial claims.



Seasonally adjusted “initial” unemployment increased 5,000 to 417,000 claims from last week’s revised 412,000 claims while seasonally adjusted “continued” claims declined by 80,000 resulting in an “insured” unemployment rate of 2.9%.



Since the middle of 2008 though, two federal government sponsored “extended” unemployment benefit programs (the “extended benefits” and “EUC 2008” from recent legislation) have been picking up claimants that have fallen off of the traditional unemployment benefits rolls.



Currently there are some 3.63 million people receiving federal “extended” unemployment benefits.



Taken together with the latest 3.55 million people that are currently counted as receiving traditional continued unemployment benefits, there are 7.19 million people on state and federal unemployment rolls.

Reading Rates: MBA Application Survey – August 24 2011

The Mortgage Bankers Association (MBA) publishes the results of a weekly applications survey that covers roughly 50 percent of all residential mortgage originations and tracks the average interest rate for 30 year and 15 year fixed rate mortgages as well as the volume of both purchase and refinance applications.



The purchase application index has been highlighted as a particularly important data series as it very broadly captures the demand side of residential real estate for both new and existing home purchases.



The latest data is showing that the average rate for a 30 year fixed rate mortgage increased 7 basis points to 4.39% since last week while the purchase application volume dropped a notable 5.7% and the refinance application volume declined 1.7% over the same period.



It's important to note that purchase applications are now sitting at the lowest level seen since 1996 while mortgage rates remain at historic lows.



Federal Reserve Chairman Ben Bernanke is slated to address the current recessionary trends playing out in the macro-economy later this week at the annual Jackson Hole conference where, it is suspected, that he will announce another major round of "quantitative easing".



In all likelihood additional QE will focus on longer term rates possibly working to push down mortgage rates even further.



The following chart shows the average interest rate for 30 year and 15 year fixed rate mortgages since 2006 as well as the purchase, refinance and composite loan volumes (click for larger dynamic full-screen version).

The Richmond Fed Survey of Manufacturing Activity: August 2011

Today, the Federal Reserve Bank of Richmond released their Survey of Manufacturing Activity for August showing that the composite index, the broadest measure of manufacturing activity, declined 9 points to a notably weak level of -10.



The most notable component measures also showed similar results with the new orders dropping to -11, shipments declining to -17 and backlog of orders plunging to -25.



The following chart plots the composite index with the red line marking a level of 0, or the threshold between increasing and declining activity.