Only 335,000 US Jobless Claims Filed In December

Housing starts in the U.S. were 954,000 in December, up 104,000 from November. On Thursday, the announcement of 335,000 initial jobless claims also made headlines; this is the lowest level since January 2008. This figure suggests growth in the job and real estate markets south of the border.

China continues to release strong data, with GDP growing 7.9% (YoY) in the last quarter of 2012. Job creation figures for December were disappointing in Australia; the economy shed 5,500 jobs. On an annual basis that gives a meagre 49,800 jobs created for the year, the worst performance since 1997.

The Loonie
“Rarely do we find men who willingly engage in hard, solid thinking. There is an almost universal quest for easy answers and half-baked solutions. Nothing pains some people more than having to think.” - Martin Luther King, Jr.

In late December, U.S. stock markets were bracing themselves for a potential fall from the fiscal cliff. But an agreement between Republicans and the President at the 11th hour occurred and euphoria took hold of the markets. The S&P 500 has gained more than 5% since the resolution of the conflict surrounding the fiscal cliff, reaching 1485, its highest level in 5 years.

However, if the past is any indicator of the future, we believe that this excitement has the possibility of being short lived as the next source of heated debate between Democrats and Republicans is just around the corner, the debt ceiling. This limit, established by a Congress controlled by Republicans, on the debt that the U.S. government may contract currently stands at 16.4 trillion.

However, given the anticipated revenues and the expenses that the Obama administration must make in order to keep all programs currently in place (from Medicare to defense programs), this threshold will be reached somewhere between mid-February and mid-March.

At the summer of 2011, in the middle of the saga surrounding the last increase in this limit, the disputes between the Republicans and Democrats had created quite a stir in the markets, the S&P 500 falling by nearly 16% in two weeks. These quarrels had even pushed the rating agency Standard & Poors to lower the credit rating of the United States (from AAA to AA +), the first time in the country’s history.

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