Category Archives: Weekly Jobless Claims

FOMC Commentary, November Leading Indicators, December Philadelphia Fed Survey, Jobless Claims

KEY DATA: Leading Indicators: +0.6%/Philadelphia Fed: 24.5 (-16.3 points)/Jobless Claims: 289,000 (down 6,000)

IN A NUTSHELL:   “The Fed may be shifting into “patience” mode, but the economy is continuing to accelerate.”

WHAT THE DATA MEAN: Today’s economic reports showed that the economy continues to improve.  The Conference Board’s Leading Economic Index jumped again in November and it looks like the increases are pointing to a very strong economy going forward.  Looking at a graph of the index, the rise seems to match the 2003-2004 housing bubble economic surge.  Supporting the view that the economy is picking up steam was another fall in weekly jobless claims.  The jump in claims near Thanksgiving seems to have been a one-week wonder and we are back to record lows, when adjusting for the size of the labor force.   As for the Philadelphia Fed’s Business Outlook Survey, a large decline was expected.  This index can be very volatile and the November number was one of the highest on record.  The December level also points to strong growth, especially since orders remain solid. 

FOMC Commentary: Yesterday, the Fed did and didn’t do what I thought they would and should do: Remove the “considerable time” phrase.  Maybe.  It didn’t do it because it repeated it.  But more importantly, the Committee substituted a new comment,that it can be patient (emphasis added) in beginning to normalize the stance of monetary policy”, and noted that patience and considerable time were similar if not equal.  Getting confused?  No kidding!  The statement seems to be the most tortured attempt at changing the psychology surrounding the timing of tightening I have seen.  I guess that is what happens when you worry more about market reaction than policy clarity.  We know little more now than we did before the meeting and press conference.  So much for better communications.

So, what does patience mean, when it comes to rate hikes?  Chair Yellen said we have a breather for the next two meetings. However, the chart of fed funds rate expectations points to a tightening in 2015, which will likely come at around mid-year.  What would make her lose her patience?  Stronger growth and that is where the data come in.  By the time we get to the April meeting, we will have three more employment reports and GDP numbers for the fourth quarter of 2014 and first quarter 2015.  If the Leading Indicators are pointing to anything it is the string of 3.5% growth rates could be sustained.  If that is the case and the job gains are above 250,000 and the unemployment rate continues to decline, it would be hard to see how wage increases don’t accelerate.  But I am guessing that patience will be tied to compensation and until we actually see large increases in wages, the Fed will continue to dawdle. 

November Retail Sales, Import Prices and Weekly Jobless Claims

INDICATOR: November Retail Sales, Import Prices and Weekly Jobless Claims

KEY DATA: Sales: +0.7%; Excluding Vehicles: +0.5%; Gasoline: -0.8%/Non-Fuel Import Prices: -0.2%; Fuel: -6.7%/Jobless Claims: 294,000 (down 3,000)

IN A NUTSHELL:   “A firm labor market is helping power stronger retail sales and it looks like we are having a very, merry holiday shopping season.”

WHAT IT MEANS:  Apparently, the reports of the consumers’ demise are premature.  The National Retail Federation was downbeat about Black Friday demand, but with sales running a week or two and Cyber Monday lasting a week, it appears households are shopping ‘till they are at least tired.  Retail sales soared in November and it wasn’t just the jump in vehicle purchases that propelled revenues forward.  Excluding vehicles, sales were still strong even when gasoline was included.  Declining prices led to a sharp drop in fuel purchases and excluding that portion of sales makes the rise even greater.  Indeed, the increases were essentially all across the retail landscape.  People even went to furniture and department stores, two areas that had been lagging. 

On the inflation front, the Fed has nothing to fear, unless they are hoping for higher inflation, which the members are.  Import prices fell in November and the declines were also across the board.  There was even some relief on the food side, which had been running counter to most other import prices.  A strong dollar is probably helping foreign companies grab for market share by lowering prices.

As for the labor market, another number, another indication that the November jobs report, while high, was not a total aberration.  Jobless claims continue to moderate and there is little reason to think that the December payroll increases will be weak.  The levels are consistent with job gains in the 250,000 range and a steady fall in the unemployment rate.  Only the return of frustrated workers can keep the unemployment rate from coming down consistently.

MARKETS AND FED POLICY IMPLICATIONS: It seems to be all coming together.  The labor market is continuing to improve, falling gasoline prices are adding to spendable income and households seem to be using that money to buy lots of things.  The holiday shopping season appears to be off to a very good start but we still have a couple of weeks to go.  Bad weather may create some ebbs and flows in the sales but I expect demand to be strong.  Last month I suggested that the holiday season could show upwards of a 5% rise and I am buoyed by the latest reports.  If we get anything close to that, we could have another quarter of GDP growth at or above 3.5%, confirming that the economy has shifted gears.  Next week the FOMC meets and it will be interesting to see how the members view the economy.  I think it is time to drop “considerable time” from the statement but whether that happens this month or next, it is coming.  The real issue is the first rate hike.  I think in spring the Committee will set the range around 25 basis points.  While that will not be a large move, it will signal the start of a long but steady process of rate hikes.

November Challenger Layoffs and Weekly Jobless Claims

KEY DATA: Layoffs (monthly): -29.8%; Year-to-Date: -5.8%/Claims: 299,000 (down 14,000

IN A NUTSHELL:  ‘It seems that every time we get labor market numbers, we get more indications that the market is tightening.”

WHAT IT MEANS:  The turtle is nearing the finish line.  The goal is a normal labor market and we can see that coming into focus.  Today’s numbers point to firms doing all they can to keep their current workers.  Challenger, Gray and Christmas’ November job cuts report was very encouraging as there was a sharp decline from the October pace.  That is important since there was a surprisingly large number of layoff announcements in October and it raised some questions about the direction of the market.  Those questions look to have been answered.  Layoffs are slowing sharply and are on target to hit the lowest level since 1997.  That was near the peak of the dot.com bubble when hiring was robust.

Confirming the strength of the labor market was a large drop in new claims for unemployment insurance.  This number had surged the previous week but we are back down below 300,000 per week and that is an indication that tomorrow’s payroll increase could be strong.

On a separate note, CoreLogic’s October foreclosure report indicates that the overhang of distressed homes is being whittled down rapidly as there is inventory has fallen by 31% since October 2013.  But there are still a large number of houses in process.  The pace of foreclosure is slowing but is still quite high.  That said, the inventory of delinquent homes is the lowest since July 2008.

MARKETS AND FED POLICY IMPLICATIONS: The slow but steady improvement in the labor market that has marked this recovery continues unabated and now we are facing the reality that the pendulum may finally be swinging away from employers and in favor of employees.  We are not there yet, but we are getting there.  That is crucial for the Fed since worker compensation seems to be the operative issue for rate hikes.  Tomorrow we get the November employment report and I wouldn’t be surprised if the job gains, including any upward revisions, total at least 250,000.  I include revisions because they have been pretty large lately and it is important to recognize the full extent of the payroll changes.  As for the unemployment rate, it is a good bet to edge down to 5.7%.  The labor market is closing in on full employment and should reach it by early spring.  That means shortages should be appearing more broadly and at that point, wage increases are likely to follow.  The timing is difficult given the change in attitudes of workers, who are still fearful of quitting or changing jobs, and business managers, who believe they should not have to give raises since they haven’t had to for so long.  That dynamic, though, creates the potential for a gap up in wage gains when more normal views of job mobility and worker compensation reappear.  And if the restraining effect of the foreclosure inventory can dissipate, the housing market would strengthen and that would add further to growth and accelerate the labor market tightening and wage increases.

October Consumption, Income, Durable Goods Orders and Weekly Jobless Claims

KEY DATA: Consumption: +0.2%; Real Disposable Income: +0.1%/Orders: +0.4%; Business Investment: -1.3%/Jobless Claims: 313,000 (up 21,000)

IN A NUTSHELL:   “On a day where there are a rafter of data, only some of them are turkeys.”

WHAT IT MEANS:  The long weekend has created a backlog of numbers and they are all coming out this morning.  The first group were somewhat mixed.  Consumer spending continued to improve in October, which is very good news.  Indeed, it rose despite a reduction in durable goods demand.  That was a little odd as total vehicle sales edged upward.  A solid holiday shopping season could push consumer demand up to 3% for the fourth quarter, which is where I have it.  As for income growth, that was not as strong as we would like, but conditions are clearly changing.  While gains are not spectacular, total wages and salaries have increased by 4.4% over the year.  Yes, some of that is due to more jobs, but about half is due to actual wage increases.  Still, adjusted for inflation, average wage increases continue to lag.

On the manufacturing front, durable goods orders rose in October.  That was a bit of a surprise, but the details are what matter.  There was a 45% increase in defense aircraft orders and that is not likely to be repeated given the spending restraints in place.  Excluding defense, orders were down sharply.  In addition, the best measure of business investment, nondefense, nonaircraft capital goods orders, posted a second consecutive 1.5% drop.  That is not a sign of aggressive business investment activity.  Order books are filling, so that should lead to more production.

Finally, there was the very strange large surge in weekly jobless claims.   The individual state data don’t seem to jive with the overall change so it is hard to really know why that happened.  Also, Thanksgiving is late this year so maybe there was an issue with the seasonal factors.  In any event, this number should be viewed with caution.  We need to see what happens over the next few weeks to determine if the labor market tightening process is moderating.  Keep in mind; the level is still consistent with solid, though not robust, job gains.

MARKETS AND FED POLICY IMPLICATIONS: It is unclear what to make of today’s numbers.  Nothing was overly strong and there were some weak reports as well.  So the best that can be said is that confusion about the strength of fourth quarter growth remains high.  The estimates range from the low 1% to over 4%, which shows that economists are clueless right now about what is happening.  I still think we could approach 4%, but we need a really good holiday shopping season.  So, go out and spend like crazy this next week.

Have a Happy Thanksgiving!

October Consumer Prices, Earnings and Jobless Claims

KEY DATA: CPI: 0.0%; Excluding Food and Energy: +0.2%; Real Hourly Earnings (Year-over-Year): +0.4%/Jobless Claims: 291,000 (down 2000)

IN A NUTSHELL:  “Stable inflation is keeping spending power up as wages continue to go nowhere.”

WHAT IT MEANS:  The Fed’s focus of attention appears to be turning to inflation and labor compensation as the members are indicating that the labor market is tightening.  At least that is what it seems.  It is hard to really know what the policy indicator du jour is at the Fed.  I guess if you keep changing the target, your aim is irrelevant.  Enough of my poking fun at the Fed.  Consumer prices went nowhere in October, which was actually a surprise.  It was expected that the decline in energy costs, which were off sharply, would lead to a fall in the Consumer Price Index.  It didn’t, even though food costs were more restrained than they had been.  There was a sharp drop in meat and poultry prices and that helped since most other components continued on their inexorable rise.  While clothing and used vehicle costs fell, new vehicle and especially services prices rose.  Meanwhile, medical costs, both services and goods, are about as well contained as we have seen them in decades. 

With inflation flat, a small rise in hourly wages allowed inflation-adjusted earnings to increase over the month.  If you want to see why consumption remains muted and so many people think we are still in recession, look at the hourly earnings numbers: They have grown by only 0.4% over the past year.

Will wage gains improve?  Eventually, as the labor market keeps firming.  Jobless claims have settled in the 290,000 a week range, which is consistent with solid to strong payroll increases.

MARKETS AND FED POLICY IMPLICATIONS: The talk is all about deflation, but the data provide little support for that view.  Excluding food and energy, the 1.8% rise over the year is not that far from the Fed’s desired 2% range.  The deceleration that occurred in the late spring and summer has turned around.  Why?  While few were watching, services inflation has rebounded, settling into a 2.5% annual range.  That is above the Fed’s target.  Services, excluding energy, is the key component in the index, making up over 57% of the total and 75% of the core.  If 2.5% is the base for services inflation, the prospects for deflation seem slim.  Meanwhile, commodities less food and energy, has been falling for over a year.  If this component starts rising even slowly, the core will exceed 2%.  My expectation is that core inflation will move above the target level early next year, keeping the Fed on course for raising rates this spring.  As for investors, the headline should be encouraging, though my analysis argues it should be a warning that inflation is not all it is not cracked up to be.

Third Quarter Productivity and Weekly Jobless Claims

KEY DATA: Productivity: +2%; Year-over-Year: +0.9%; Unit Labor Costs: +0.3%; Year-over-Year: +2.4%/Jobless Claims: 278,000 (down 10,000)

IN A NUTSHELL:   “As the labor market continues to firm, there are growing hints, but still just hints, that wage pressures are starting to build.”

WHAT IT MEANS:  Okay, the election is over and we will have to wait until January for the new Congress to start creating whatever chaos they want to create, so let’s get back to economic reality.  Businesses are doing what they can to keep labor costs down and in the summer, they pretty much succeeded.  Third quarter productivity gains almost completely offset labor compensation increases.  That led to a modest rise in labor costs, which is good news for prices.  These data are wildly volatile, so it is worthwhile looking at the changes over the year.  Since the third quarter of 2013, productivity rose modestly while labor costs were up fairly solidly.  And, for the first three quarters of the year, productivity increased by less than 1% while, labor compensation rose by 3.1%.  Even adjusting for inflation, compensation is up by 1.3% so far this year.  It is possible that inflation-adjusted earnings could rise at the fastest pace since 2007.  That is a clear sign that the tightening labor market is forcing firms to pony up a little more money. 

There were other data on the labor market, but they were more mixed.  Weekly jobless claims dropped solidly and the four-week average remains at historically low levels.  However, The Challenger, Gray and Christmas layoff announcement report jumped in October to its second highest level this year.  It was noted that October and November tend to be big months for layoffs as firms set business plans, so we should probably wait and see how the rest of the year plays out.  Also, we really don’t know where those cuts will come or if they will even take place.  That said, layoff notices are down by over 4% so far this year.

MARKETS AND FED POLICY IMPLICATIONS: Firms keep pushing their workers harder and harder as they hold back both their hiring and compensation.  But the dam seems to be breaking.  Productivity gains this year will probably be in the one percent range, making it four consecutive years of modest increases.  With compensation rising, there is pressure on margins and firms are worried about paying workers even more.  But it’s the tightening labor market that will likely be the driving force in 2015 and that means either firms will have to start raising prices or shrinking margins.  Most likely we will see a little of both.  But that doesn’t mean earnings have to weaken.  If economic growth is above 3%, as I believe it will be, companies will have to make it the old fashion way, through volume.  Are investors thinking about the implications or modest productivity gains and rising labor costs?  Probably not, as the headlines don’t shout rising wage pressures.  But the Fed members know the devil is in the details and they say a lot.  Regardless, tomorrow is Employment Friday and we will see what happened with October payrolls and the unemployment rate.  I expect job gains to be well north of 250,000 while the unemployment rate remains at 5.9%.

Third Quarter GDP and Weekly Jobless Claims

KEY DATA: GDP: +3.5%; Consumption: +1.8%/Jobless Claims: 287,000 (up 3,000)

IN A NUTSHELL:   “The economy just may have shifted gears before anyone expected and the firming in the labor market provides hope the strong growth can continue.”

WHAT IT MEANS:  I have been arguing for a while now that the underlying economic fundamentals are improving rapidly and the economy should be shifting into higher gear soon.  That shift may be taking place already.  Economic activity expanded by a better than expected pace in the third quarter and the report was not filled with too many head-scratchers.  Consumer spending remains disappointing and the weak link is still services.  Of course, this is the biggest individual component of GDP, accounting for two-thirds of consumption and 45% of all economic activity.  It is hard to grow rapidly if people don’t purchase things like housing, utilities, medical care or recreation services at a decent pace.  So, where did growth come from?  Business investment was solid, growing at sustainable paces for equipment, structures and technology.  The housing market improved, though residential investment was nothing spectacular.  We shipped a ton of goods overseas while cutting back on our demand for foreign products.  Major reductions in oil imports are really a great boon to growth as we are keeping an awful lot of money in the U.S.  The government is back in the spending business with national defense leading the way.  That was probably make-up for all the cuts made earlier in the fiscal year.  But nondefense purchases rose as well and state and local governments continue to translate growing revenues into increasing spending.  Inflation remains muted and actually decelerated fairly sharply.  I suspect the Fed members were not pleased to see that.

One reason I am so optimistic about the economy is my view that the labor market has already tightened and stronger wage gains are in sight.  While jobless claims edged up last week, the level remains extremely low and it really does look like the October jobs report could be better than the September one, which we all agree was quite good.

MARKETS AND FED POLICY IMPLICATIONS: The Fed ended quantitative easing yesterday, pointing to improving economic and labor market conditions.  What could encourage the FOMC to start raising rates in the spring, as I expect, is continued strong economic growth, which leads to really tight labor markets.  With consumer confidence rising, falling gasoline prices creating fatter wallets, job gains accelerating, unemployment declining and incomes rising, the holiday shopping season is setting up nicely.  The National Retail Federation expects demand to rise by 4.1% this season, up from 3.1% last year.  I think that may be conservative.  I am in the 5% range.  That could lead to a rise in fourth quarter consumption, powering growth back to the 4% range.  A string of 3% or more growth rates, which the Fed will likely be staring at when it meets in January, coupled with an unemployment rate closing in on the 5.5% full employment rate, should be enough for most Fed members to throw in the towel.  Investors will have to start balancing the reality of rate hikes in the first half of next year with better growth.  We will find out then if it was the Fed or the economy that generated the outsized equity market gains over the past few years.

September Leading Indicators and Weekly Jobless Claims

KEY DATA: LEI: +0.8%; Coincident Index: +0.4%/Jobless Claims: 283,000 (up 17,000)

IN A NUTSHELL:  “Despite some issues with housing, signs are pointing to even better growth in the months ahead for the economy and the labor markets.”

WHAT IT MEANS:  With turmoil all around, you would assume the economy is in danger of stalling.  Wrong again.  Investors have decided that maybe the world is not falling apart, even as more chaos occurs, and the equity markets have rebounded.  Consumer confidence, at least through the first half of the month, has actually improved.  And now we see that an indicator of future growth, The Conference Board’s Leading Economic Index, rose sharply for the second time in three months.  The measure had stalled in August, but it bounced back with a vengeance and the three-month average increase is pointing to even better growth ahead.  The Coincident Index, which measures current activity, has not been rising as quickly as the LEI might imply.

Jobless claims, one of the factors driving the indicators, rose last week.  But the increase was from an historically low level when labor force size is considered.  These numbers are volatile.  Smoothing them, the four-week average was down to a new record low.  Also, a new index about the labor market, ADP’s Workforce Vitality Index, posted a solid third quarter rise from the second quarter level.  Conditions in the South and West have firmed sharply over the past year.  This report, when coupled with the jobless numbers, point to an accelerating economy.  

About the only concern in the Conference Board’s report was the housing market and the data are really all over the place.  But we are seeing things improve, such as existing home sales.  Also, the Federal Housing Finance Agency released its August Housing Price Index and prices rose solidly.  The index is back to where it was in August, 2005 but is still nearly 6% below its April, 2007 peak.  The year-over-year increase, however, is decelerating, though it was better in August than July.

MARKETS AND FED POLICY IMPLICATIONS: Today was a good day for the economic numbers.  They should brighten an already rebounding investor mood as they point to stronger growth in the future.  Issues such as Ebola and ISIS terrorism may cause concern, but they shouldn’t have a great impact on fundamental economic activity.  And if the labor markets are tightening, as most data seem to imply, then the Fed has to take notice.  We will see if the lights are on in the Eccles Building next week as the FOMC is meeting.  Quantitative Easing should be ended but concerns about less than desired inflation and labor market slack may still be at the center of the discussion.  Since some at the Fed want to see the whites of inflation’s eyes before shooting, there is no reason for them to indicate they are going to pull the trigger soon.  But if the October and November employment reports are as good as I suspect, conditions may be a lot different when the Fed members meet again in the middle of December.  That is when I expect them to start signaling that rates will be going higher and not after a considerable time.

September Industrial Production and Weekly Jobless Claims

KEY DATA: IP: +1.0%; Manufacturing: +0.5%/Claims: 264,000 (down 23,000)

IN A NUTSHELL:   “Manufacturing is strong and with jobless claims at the lowest level in over fourteen years, it is clear that the economy and Wall Street are in different worlds.” 

WHAT IT MEANS:  With chaos reigning in the craps table called Wall Street, we need to step back a little and start looking at the underlying economy.  The data look pretty good.  Industrial production rebounded sharply in September as utility output surged.  Manufacturing was up solidly and the increase was actually better than the headline would have you believe, and that number was pretty good.  Vehicle sector production dropped for the second consecutive month but it looks like sales and inventories are reasonably balanced, so don’t expect the declines to continue.  Manufacturing production rose at a 3.5% annualized pace during the third quarter.  In September, more consumer goods, business equipment and supplies and construction supplies was produced.  The only industry, other than vehicles, that posted a significant decline was wood products while the gains were spread across both durable and nondurable goods industries.

Supporting the view that manufacturing is improving was the Philadelphia Fed’s October Manufacturing Business Outlook Survey.  While activity eased a little, it remained at a level consistent with those posted during the solid growth periods in both the 1990s and 2000s.  Also, the percentage of firms indicating activity had declined over the month actually fell.

Maybe the best number today was the jobless claims, which came in at the lowest level since April 2000.  Adjusting for the size of the labor force, we are at record low levels for a weekly number and the four-week moving average.  Firms are just not cutting their workforces and that points to the possibility that the October employment report could be really strong.

MARKETS AND FED POLICY IMPLICATIONS: The economic reports were really good but investors decided that panic was the better part of valor.  Really people, did you think that we could keep piling up huge gains in equities when the U.S. and world economies were growing moderately at best?  The Dow and S&P peaked in mid-September.  Over the previous two years, those indices rose by 27.3% and 38.7%, respectively.  Meanwhile, GDP grew by only 4.5% between 3rd quarter 2012 and 3rd quarter 2014 (assuming a 3% growth rate this past quarter). I don’t know how many times I said it but I will repeat it again: Wall Street and Main Street have become totally disconnected.  If you use the equity markets as an indicator of the economy, you are looking at the wrong thing and the Fed should care little about Wall Street when it comes to determining a monetary policy that is best for the economy.  I am sure there will those who argue the Fed has to put off tightening so it doesn’t spook the markets even more, but that would be arguing the Fed should use a misleading indicator.  Ultimately, equity prices, earnings and the economy will be better in synch but right now, I don’t worry too much about a market correction when the data keep showing the underlying economy continues to grow decently and the pace may actually be picking up.

September Challenger Layoff Announcements and Weekly Jobless Claims

INDICATOR: September Challenger Layoff Announcements and Weekly Jobless Claims

KEY DATA: Layoffs: down 23.8%; Jobless Claims: 287,000 (down 8,000)

IN A NUTSHELL:   “With layoffs nearing a 17 year low and jobless claims at historically low levels, the logical next step is for hiring to surge.”

WHAT IT MEANS:  One more day to the jobs report and a couple of indicators are really pointing to a solid increase in payrolls.  Let’s begin with the Challenger, Gray and Christmas monthly report on layoff announcements: In September, job cut warnings fell dramatically, hitting the lowest level in 14 years.  The third quarter total was down 8.6% from the same quarter in 2013 and it is possible that for all of 2014, layoff announcements will be the lowest since 1997.  I guess the simplest thing to say is that companies are holding on to their workers as tightly as possible.  The lack of pink slips is showing up at the unemployment office.  Jobless claims fell again and when you adjust the level for the size of the workforce, we are at record lows.   The number of people receiving unemployment payments is also declined sharply, reaching its lowest level since 2006.  While continuing claims are not near record lows, given the extended period that people can receive unemployment insurance, they are really low.

Several other reports were released today.  On the labor front, the National Federation of Independent Business found that small business hiring was strong in September, which supports a stronger than expected level of hiring.  However, small business hiring generally doesn’t make it into the initial BLS numbers, so don’t be surprised if the September gain, whatever it is, gets revised upward.  There was some concern about future hiring as plans to add workers easedThe New York City Supply Managers’ survey indicated that manufacturing activity picked up steam in September after moderating in August.  Expectations also rose solidly.   And August factory orders were off sharply, basically because of the wild swings we have seen in aircraft orders.  Fattening order books means output should expanding.

MARKETS AND FED POLICY IMPLICATIONS:  The underlying data on labor market conditions point to a firming in the market.  Companies are not cutting workers and as long as growth continues at a decent pace, hiring will have to accelerate.  Whether it shows up in the September or October report is hard to say but one of them should be really big.  Still, feedback I get from personnel firms are that companies continue to be hesitant about pulling the trigger on hiring.  The number of searches is up but placements remain difficult.  It seems that executive management is still resistant to expanding payrolls and adding to costs even though line management is begging for more workers.  Something will have to give with the question not being what but when.  Regardless, today everyone simply watches and waits.  Those who like to gamble may do so but keep in mind, the employment numbers can be very volatile.  There was no reason to have such a low gain in August and if it was just a seasonal adjustment issue, then we could get some make-up in September.  That would imply the likelihood is that the number will surprise on the upside than the downside.