Economics Update

Our economy just had one of those days when you wonder why you get out of bet.

First, we have initial unemployment claims spiking to the highest number since October, 1982, 626,000. The consensus estimate had been 580,000.

The more reliable, and less noisy, 4 week moving average was up too, from 543,250 to 582,250, and continuing claims hit 4,788,000, another new record.

In manufacturing, December new factory orders fall 3.9%, well above the estimate of 3 %, and in rental real estate, the MIT commercial property price index posted a record drop, 10% in Q4 of 2008.

In international high finance, the Bank of England its benchmark rate by 50 basis points (½%), to 1%, which breaks last month's record.....Considering that the BoE has been around since 1694, that's a long record.

Across the channel in Euro land, the European Central Bank has left its benchmark unchanged, though I think that this is less from optimism than from the inflation-hawk nature of the ECB's charter, and the fear of the zero rate destroying their ability to manage the economy with monetary means.

Meanwhile, mortgage interest rates have continued their increase, with the 30 year fixed being reported at 5.25%.

With the rate cuts in England, and the ECB still signaling future rate cuts, the dollar was up today.

The dismal job numbers drove oil down.