• Applications for jobless benefits matched a four-decade low
  • Rising rents propel pickup in consumer prices ex-food, energy

What you need to know about Thursday’s U.S. economic data:

CONSUMER PRICES (SEPTEMBER)

  • Overall consumer price index dropped 0.2 percent on plunging energy
  • Cost of living ex-food and fuel rose 0.2 percent, more than forecast
  • CPI unchanged from September 2014, while the core was up 1.9 percent (most since July 2014)
  • Rents advanced 0.4 percent, most since June, while medical care costs also increased

The Takeaway: Higher housing costs may be unwelcome news for consumers, but they’re helping underpin inflation that’s still too far from the Federal Reserve’s 2 percent goal. Rents on primary residences have increased 2 percent over the past six months, the most since 2007. That helped the core price gauge increase more than than the median forecast of 0.1 percent. The broader cost index fell, dragged down by the biggest slump in gasoline since January. The report contained some not-so-good news for Social Security recipients. They will receive no cost-of-living adjustment next year, the first time that’s happened since 2010 and 2011, according to the Social Security Administration.

JOBLESS CLAIMS (WEEK ENDED OCT. 10)

  • Applications to receive benefits unexpectedly dropped by 7,000 to 255,000 to match the lowest since November 1973
  • Four-week average fell to 265,000 for the fewest since December 1973
  • Total number of Americans collecting benefits smallest in almost 15 years

The Takeaway: Companies starved for skilled workers are retaining staff with job openings at a record high. The latest National Federation of Independent Business report showed 16 percent of small businesses in September said quality of labor was their single-most important problem, almost double the 9 percent who said so a year earlier. While weaker global demand and a slump in energy markets have encouraged some businesses to slow the pace of hiring, outright dismissals are few and far between as the domestic economy muddles along.

Jobless claims as share of total employment is at record low
Jobless claims as share of total employment is at record low

BLOOMBERG CONSUMER COMFORT (WEEK ENDED OCT. 11)

  • Index climbed for a fourth straight week, reaching six-month high of 45.2
  • Gauge has soared 5 points over the past four weeks, the biggest advance over a similar period since 2009
  • Recent gain has been driven by workers with part-time jobs, who have seen a 18.4 point jump in confidence over the past month, the biggest in data to 1990
  • Measure of personal finances on a tear, reaching the second-highest level since 2007

The Takeaway: Improving views of personal finances signal the turmoil in financial markets and slowdown in hiring is not affecting consumer psyches, which bodes well for sustained gains in consumer spending. The surge in sentiment among part-time workers may indicate the labor market remains strong as people see better prospects of securing full-time positions.

PHILADELPHIA FED/NEW YORK FACTORY SURVEYS (OCTOBER)

  • Philly Fed index at minus 4.5 after minus 6 -- first consecutive months of contracting activity since early 2013
  • Empire State business barometer at minus 11.4 after minus 14.7 -- third straight negative month and longest stretch since August 2012-January 2013
  • Philly Fed orders gauge weakest since June 2012, unfilled orders second-lowest since 2011

The Takeaway: The first regional surveys for the month signal the headwinds of weaker global demand are morphing into gale force warnings for American producers. A weakening in order backlogs (both surveys) indicates further production cutbacks that may filter down to workers on factory floors with fewer hours or worse -- outright job losses. Gauges of sales were dismal as well, with the Empire State’s shipments measure hovering near the weakest point since the depths of the recession in March 2009.

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