by Laura Conaway

This morning, I'm turning the mic over to Ian Shepherdson, chief U.S. economist at High Frequency Economics. Shepherdson sends two notes today. (Bonus note on deflation after the jump.)

On weekly unemployment numbers, he writes:

Jobless claims jumped by 62K to 589K, well above the consensus 543K and matching the cycle peak recorded in the week of December 20. Last week's claims were revised up by 3K. . .The labor market remains a disaster area.

 

On housing from the fourth quarter of 2008, Shepherdson says:

Housing starts dropped 15.5% to 550K, below the consensus 605K and the lowest level ever. Permits also fell to an all-time low,down 10.7% to 549K. . . . We think, though, that activity is now near bottom, so the rate of decline in Q1 will be nothing like as fast as in Q4. We hope.

Bonus: High Frequency's chief economist Carl Weinberg writes that the recession will continue to drag down the Consumer Price Index. He keys in on the public's perception of deflation:

In the financial markets, perceptions are more important than realities. If people perceive themselves to be bogged down in a deflation, they will behave accordingly. They will defer purchases because they expect the price of a new coat or refrigerator or iPod to be lower in a few months than it is right now. Indeed, all the people in the world who are deferring house purchases rather than borrow money to buy a depreciating asset . . .are demonstrating deflationary behavior. . . . This will make the recessions in the developed market economies worse than they might have been in an environment of rising prices.