It might be due to census workers peeling off the payroll list and filing for unemployment insurance (we won't know for sure for a week or two and, if so, would pass quickly), but the initial unemployment claims hit 500,000 Thursday.
Some optimists also mentioned out loud Thursday that there has been a larger-than-usual mustering-out of military service people, which would be a one-time thing, but the number is the number and I hate trying to explain it away. 500K is a level that has often been associated with recession. The four-week moving average also moved up to 482,500.
The Philadelphia Fed's monthly survey surprised us all with a reading of -7.7 when the consensus had been for a measurement of +7.0. A zero reading is no growth. This Philly Fed number is the lowest since August 2009. The details were as grim as the headline. New orders, shipments and employment sub indices all fell.
The Empire State reading earlier this week wasn't negative, but it wasn't anything to write home about.
Along with the mediocre Empire State reading, the indication is the National Institute of Supply Management (ISM) could well drop into contraction territory below 50. It would take a reading in the low 40s before recession talk would be appropriate, but as a Chinese philosopher (Lao-tzu) said, "A journey of 1000 miles begins with a single step." (Or something like that).
Financial types love to appear smart. Maybe everyone does, but financial types come up with names for things that aren't intuitive, at least to me, so you have to be in-the-know and therefore smart. Quantitative Easing — QE — is defined in Wikipedia as, "A monetary policy used by central banks to increase the supply of money by increasing the excess reserves of the banking system."
I know what it is and I am now lost!
But, to continue, "A central bank does this by first crediting its own account with money it has created ex nihilo (out of nothing)."
Now I got it!
"It then purchases financial assets including government bonds, mortgage-backed bonds, yadda, yadda, yadda." These purchases give the seller (banks) the excess reserves they can hopefully loan out to stimulate the economy.