Commentary: The number of Americans claiming first-time unemployment benefits dropped 22,000 to 405,000. While the decline is certainly a move in the right direction -- until claims can penetrate and remain below the 400,000 mark for several consecutive weeks economists will continue view the labor market as exceptionally soft.
In a separate report the Labor Department said prices at the factory gate posted the steepest decline since February 2010 on the back of notably lower energy costs. The more important core rate of inflation at the producer level (a measure which excludes the volatile food and energy components) was unchanged from the May reading. Mortgage investors yawned.
The Commerce Department announced this morning that sales at the nation's retailers increased a very slim 0.1% last month. The gain was actually better than most economists had anticipated -- but overall the data continues to indicate reluctance on the part of consumers to spend.
The Treasury Department is set to wrap-up their three-part, $66 billion auction process today with the sale of a $13 billion stack of 30-year bonds. Most analysts expect today's sale to go well. The majority of credit market participants seem to be thinking either the economy will slow down enough to warrant additional stimulus from the Fed in the form of QE3 -- or the Fed will choose to do nothing with respect to additional stimulus and the economy will slow down. Either way, its good for bonds - and by extension it is good for the longer-term prospects of steady to perhaps fractionally lower interest rates.
THE MARKET IS ALWAYS RIGHT! . YOU AND I ARE SOME OF THE TIME
