Business

Morning Market Roundup: Unemployment Rises, Oil UP, Prepare for the IKEA’s Hotel Chain

Here’s what’s important in the business world this morning:

Unemployment: The number of Americans applying for unemployment benefits edged up slightly last week by 2,000.

Unemployment benefit applications rose to a seasonally adjusted 366,000, the Labor Department said. The less volatile four-week average fell by 5,500 to 363,750. That was the lowest level since late March.

Applications have trended lower in the past two months.

The total number of people receiving some kind of unemployment assistance fell, dipping to 5.68 million for the week ending July 28, 70,000 below the previous week.

IKEA: IKEA is planning to launch a chain of budget hotels in Europe.

The property division of Inter IKEA — the company that owns the IKEA intellectual property rights — is planning hotels in 100 locations across Europe. The first two hotels are expected to open in Germany in 2014. Other locations earmarked for hotels include Belgium, the Netherlands, the Nordic countries, Britain and Poland.

Although the chain won‘t use IKEA’s name or furniture, it will ingrain the IKEA philosophy of “good quality at a reasonable price.”

Inter IKEA, which already owns a handful of hotels in Europe since the start-up of the property division in the 1990s, will work with another company to operate the chain. Muller declined to reveal the name of the hotel chain, but it is expected to be released in an official announcement in September.

IKEA, the world’s largest furniture retailer, employs 131,000 people in 41 countries and its 287 stores drew in 655 million customers in 2011. It has a complex corporate structure where the ownership of IKEA’s outlets is separated from the ownership of its brand name and intellectual property rights.

Earlier this year, the IKEA Group announced a collaboration deal with Chinese consumer electronics firm TCL under which it would start selling TV’s and sound systems integrated into IKEA furniture.

Oil: Oil remained above $94 a barrel Thursday after an unanticipated drop in U.S. crude inventories and stronger retail sales helped keep near three-month high.

Benchmark oil for September delivery was down 13 cents to $94.21 a barrel in midday trading in Europe in electronic trading on the New York Mercantile Exchange. The contract rose 90 cents to finish at $94.33 per barrel Wednesday in New York.

On the ICE Futures exchange in London, Brent crude was up 35 cents at $114.66.

The Energy Department said Wednesday that stockpiles fell 3.7 million barrels last week to 366.2 million barrels, suggesting stronger demand. Analysts had predicted a decline of 1.5 million barrels, according to Platts, the energy information arm of McGraw-Hill. It marked the third consecutive large weekly decrease in oil supplies. Decreases tend to cause a rise in oil prices.

U.S. Futures: Stock futures rose Thursday after a surprisingly strong report about the housing sector.

Home construction slowed, but investors keyed on the number of housing permits issued. That reached a four-year high.

Dow Jones industrial futures rose 26 points to 13,161. The broader S&P futures tacked on 2.8 points to 1,406.30. Nasdaq futures gained 7.25 points to 2,745.75.

The Commerce Department reported that construction of single-family homes and apartments dipped 1.1 percent in July compared with June, to a seasonally adjusted annual rate of 746,000. In June, the rate had been 754,000, the fastest pace since October 2008.

The Associated Press contributed to this report.

Comments (9)

  • lukerw
    Posted on August 16, 2012 at 2:11pm

    Do the Obama’s… Climax… upon New of Economic Destruction of the US?

    Report Post » lukerw  
  • OLDPAINT
    Posted on August 16, 2012 at 10:53am

    I don’t eat much. They do.They’re not only starving themselves but us too.

    Report Post » OLDPAINT  
  • Rothbardian_in_the_Cleve
    Posted on August 16, 2012 at 10:39am

    The new claims number is bogus. There are some sites out there that actually track employer sentiment as well as new layoffs. That is a better read. Suffice to say, that isn’t good either. The real number is the participation rate. Specifically the full time participation rate. We know that participation rate has been as low as the Carter years. However, all the “new Obama jobs” have been part time. It used to be that PT jobs ran about 2% of total non-farm. That is now over 5% and that trend started on Obama’s watch. Employers are NOT bullish about labor nor do they want to pay for Obamacare. Ah, the law of unintended consequences eh?

    Philly Fed manufacturing index fell again (5 months), missed expectations (whatever) and has been in negative territory (contraction) for 4 months. And despite the bullishness on housing permits, starts, and builder confidence (all of which are sorta fake)…come to find out today that permits and starts slumped again in July after popping in June. But, like I said, that isn’t the real story. Look at this chart from the St. Louis Fed. Housing COMPLETIONS are still awful and not going anywhere. You can play games on the front end all you want. Truth is, builders aren’t completing homes.

    http://research.stlouisfed.org/fred2/series/COMPUTSA

    Report Post » Rothbardian_in_the_Cleve  
    • Rothbardian_in_the_Cleve
      Posted on August 16, 2012 at 10:53am

      I need to update my data, but at one point earlier this year, new jobs and jobless claims had been revised unfavorably the week/month after 37 out of 39 periods. Now, if you have a statistical model the odds that your predicted variable would miss that direction 37 out of 39 times is somewhat akin to predicting the lottery numbers this week. If you flipped a quarter 39 times how often would you get 37 heads?

      The media reports the “printed” number when it comes out. They never report the “official” number that get’s recorded. Only nerds like me go back to look at that. The BLS and ministry of truth are manipulating public opinion because they know that 99.9% of the population is either too busy/lazy to go back and check or too stupid to know how to.

      Gee, ever wonder what else they are lying to you about?

      Report Post » Rothbardian_in_the_Cleve  
    • contkmi
      Posted on August 16, 2012 at 11:03am

      Roth, you’re absolutely right about the number being revised upward so often. I think I’d heard 63 of 64 weeks.

      Also, if people want a better understanding of real-world unemployment, they need to look at the U6 numbers. The U3, which is what the media reports, has been politically manipulated to look better by Obama and his ilk. The U6 is a much better indicator, even though it’s a trailing indicator.

      Enough to make one sick.

      Report Post » contkmi  
    • Rothbardian_in_the_Cleve
      Posted on August 16, 2012 at 11:12am

      @Cont,

      Wow! It’s up that high now?

      Report Post » Rothbardian_in_the_Cleve  
    • contkmi
      Posted on August 16, 2012 at 11:36am

      Roth,

      Is what up that high now? The U6 or the revisions? LOL

      Last I heard, and I don‘t think it’s an exaggeration, the rate had been revised upward that many times. In doing some searching just now, I saw as high as 73 of 74 weeks it’s been revised upward. In posts from May I was seeing 46 of 47 weeks.

      Report Post » contkmi  
    • Rothbardian_in_the_Cleve
      Posted on August 16, 2012 at 11:47am

      Dang. That is AMAZING!!! Not a peep. Media doesn’t report that. People don’t research it or question it. How are we supposed to fix this thing if 300M people are asleep at the wheel. The government could tell them anything and people will accept it. We are a nation of lemmings. Thanks for the update. More importantly, guess it has been a while since I’ve updated that data….Yikes. Had a model that used it at one point, but no more.

      Report Post » Rothbardian_in_the_Cleve  
    • soitaintso
      Posted on August 16, 2012 at 1:32pm

      ROTH- Thanks for the info. Glad that people like you are out there. I research what I can as well but others like you have helped me keep track of things as well.

      Report Post »  

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