Heavy economic reportage this morning ahead of the opening bell is helping send futures up nicely this morning — still not where we were, at or near all-time index highs, last week, but closing in. Following new jobless claims, productivity and trade balance data, the Dow is +90 points, the S&P 500 is +20 and the Nasdaq +110 points at this hour.
Initial Jobless Claims struck a rare numerical phenomenon: 217K new claims reported for last week matched the 217K consensus estimate, as well as the 217K adjusted higher for the prior week. Technically, this is the highest level in a month, but still below the 52-week average, which appeared as if 250K+ weekly jobless claims were going to be part of our reality. The labor market has performed much better than anticipated, even if the days of 160K new claims is clearly a thing of the past.
Continuing Claims snuck back over the 1.9 million level this morning, after a revision to the previous week reported inched back underneath it upon revision. Headline 1.906 million longer-term jobless claims is the highest record since mid-November last year, after the prior week’s 1.905 million has been revised to 1.898 million. In any case, we’ve been holding within the 1.8-1.9 million range since around Thanksgiving. The question is whether we’ll continue to creep up to the 2 million longer-term jobless claims level, which we haven’t seen since the final months of 2021.
Though much is made of the U.S. domestic workforce, it doesn’t have a lot of context without also discussing productivity. After all, if our economy is being more productive, it will much more easily handle higher prices for goods, services and wages. Lucky for us, the first revision to Q4 Productivity is out this morning, as well: +3.2% is 10 basis points (bps) higher than anticipated, but right in-line with the initial productivity print. Unit Labor Costs came down to +0.4% from +0.6% expected and +0.5% posted last time around. Through this lens, higher productivity and lower costs for employment are beneficial to the overall economy.
Finally, the U.S. Trade Balance for January sank a bit deeper than analysts were looking for: -$67.4 billion was beneath the -$63.4 billion estimate, while the previous month’s revision moves from -$62.2 billion to -$64.2 billion. We never like to see our trade deficit getting steeper — oil exports were again a notable issue — but we are within a more desirable range over the past year and a half or so than we were earlier, such as when we dropped below -$100 billion in early 2022.
We get more testimony from Fed Chair Jerome Powell this morning on Capitol Hill — this time in front of the Senate Banking Committee — about the outlook toward monetary from the Fed, both at the next Federal Open Market Committee (FOMC) meeting in a couple weeks and beyond. If today’s talking points are anything like yesterday’s, it will likely be another relatively lackluster report. Markets took the positive tack upon hearing interest rate cuts are still relatively front-of-mind at the Fed, though no one currently expects a rate cut until the May FOMC meeting, at the very earliest.
Image: Bigstock
Economic Data Deluge
Heavy economic reportage this morning ahead of the opening bell is helping send futures up nicely this morning — still not where we were, at or near all-time index highs, last week, but closing in. Following new jobless claims, productivity and trade balance data, the Dow is +90 points, the S&P 500 is +20 and the Nasdaq +110 points at this hour.
Initial Jobless Claims struck a rare numerical phenomenon: 217K new claims reported for last week matched the 217K consensus estimate, as well as the 217K adjusted higher for the prior week. Technically, this is the highest level in a month, but still below the 52-week average, which appeared as if 250K+ weekly jobless claims were going to be part of our reality. The labor market has performed much better than anticipated, even if the days of 160K new claims is clearly a thing of the past.
Continuing Claims snuck back over the 1.9 million level this morning, after a revision to the previous week reported inched back underneath it upon revision. Headline 1.906 million longer-term jobless claims is the highest record since mid-November last year, after the prior week’s 1.905 million has been revised to 1.898 million. In any case, we’ve been holding within the 1.8-1.9 million range since around Thanksgiving. The question is whether we’ll continue to creep up to the 2 million longer-term jobless claims level, which we haven’t seen since the final months of 2021.
Though much is made of the U.S. domestic workforce, it doesn’t have a lot of context without also discussing productivity. After all, if our economy is being more productive, it will much more easily handle higher prices for goods, services and wages. Lucky for us, the first revision to Q4 Productivity is out this morning, as well: +3.2% is 10 basis points (bps) higher than anticipated, but right in-line with the initial productivity print. Unit Labor Costs came down to +0.4% from +0.6% expected and +0.5% posted last time around. Through this lens, higher productivity and lower costs for employment are beneficial to the overall economy.
Finally, the U.S. Trade Balance for January sank a bit deeper than analysts were looking for: -$67.4 billion was beneath the -$63.4 billion estimate, while the previous month’s revision moves from -$62.2 billion to -$64.2 billion. We never like to see our trade deficit getting steeper — oil exports were again a notable issue — but we are within a more desirable range over the past year and a half or so than we were earlier, such as when we dropped below -$100 billion in early 2022.
We get more testimony from Fed Chair Jerome Powell this morning on Capitol Hill — this time in front of the Senate Banking Committee — about the outlook toward monetary from the Fed, both at the next Federal Open Market Committee (FOMC) meeting in a couple weeks and beyond. If today’s talking points are anything like yesterday’s, it will likely be another relatively lackluster report. Markets took the positive tack upon hearing interest rate cuts are still relatively front-of-mind at the Fed, though no one currently expects a rate cut until the May FOMC meeting, at the very earliest.