Thursday, March 18, 2021
New Initial Jobless Claims are out this Thursday, and though we remain below the most recent higher plateau in the 800Ks, we drew closer last week than most analysts had predicted: 770K new claims for the past week. This is up 45K from the upwardly revised 725K, and the highest number we’ve seen in five weeks.
Continuing Claims continued their steady, gradual lower slope to 4.124 million from 4.14 million the previous week. However, as we point out here just about every week, Americans unemployed due to the coronavirus pandemic are picked up by Pandemic Unemployment Assistance (PUA), which has received a renewal in the American Rescue Plan to sop up those on the longer-term unemployment cycle. As a result, Continuing Claims are less than a clear read of long-term unemployment.
Speaking of PUA, though, these weekly figures have come down, suggesting there is some strength in the labor market not detected directly by these weekly headline numbers. Last week, 282K unemployed Americans collected from PUA, but that’s way down from the 479K in the previous read. Perhaps the massive hiring we’ve seen in the Leisure & Hospitality space in the federal government’s nonfarm payroll numbers earlier this month has taken care of a good bit of longer-term unemployed citizens.
Meanwhile, today’s Philly Fed headline for March blew the doors off expectations: 51.8 versus 22.0 expected. Now, these monthly records are not the most stable of economic metrics, but we have not seen this big a boost in manufacturing productivity from the 9th largest economy and 6th largest city in the U.S. for nearly 30 years. This number basically doubled the highest points we’d seen following the pandemic shutdown we’d seen in the spring of 2020.
Fed Chair Jay Powell speaks publicly again later today, following yesterday’s press conference where he took a more dovish stance on inflation and the Fed’s reaction to it than many analysts were expecting. Well, today’s economic prints are a useful snapshot into what, no doubt, the Fed has been considering: while manufacturing growth is way up as the post-pandemic era becomes imminent, America’s unemployment situation is still a problem worth grappling with.
Market indexes are down at this point in today’s pre-market, threatening the Nasdaq’s three-day winning streak. We’ve seen a pause in the investment rotation from high-growth tech, especially companies that benefited from the “shelter in place” initiatives that began a year ago, into areas like Energy, Furniture and Travel & Leisure. With the 10-year bond rate climbing over 1.75% on its way to the Fed’s optimum 2%, investors are now wary of the Fed changing course, despite Powell’s assurances to the contrary.
Questions or comments about this article and/or its author? Click here>>
Zacks Top 10 Stocks for 2021
In addition to the stocks discussed above, would you like to know about our 10 best buy-and-hold tickers for the entirety of 2021?
Last year's 2020 Zacks Top 10 Stocks portfolio returned gains as high as +386.8%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
Access Zacks Top 10 Stocks for 2021 today >>
Image: Bigstock
Jobless Claims Climb to 770K, Philly Fed Up Huge: 51.8
Thursday, March 18, 2021
New Initial Jobless Claims are out this Thursday, and though we remain below the most recent higher plateau in the 800Ks, we drew closer last week than most analysts had predicted: 770K new claims for the past week. This is up 45K from the upwardly revised 725K, and the highest number we’ve seen in five weeks.
Continuing Claims continued their steady, gradual lower slope to 4.124 million from 4.14 million the previous week. However, as we point out here just about every week, Americans unemployed due to the coronavirus pandemic are picked up by Pandemic Unemployment Assistance (PUA), which has received a renewal in the American Rescue Plan to sop up those on the longer-term unemployment cycle. As a result, Continuing Claims are less than a clear read of long-term unemployment.
Speaking of PUA, though, these weekly figures have come down, suggesting there is some strength in the labor market not detected directly by these weekly headline numbers. Last week, 282K unemployed Americans collected from PUA, but that’s way down from the 479K in the previous read. Perhaps the massive hiring we’ve seen in the Leisure & Hospitality space in the federal government’s nonfarm payroll numbers earlier this month has taken care of a good bit of longer-term unemployed citizens.
Meanwhile, today’s Philly Fed headline for March blew the doors off expectations: 51.8 versus 22.0 expected. Now, these monthly records are not the most stable of economic metrics, but we have not seen this big a boost in manufacturing productivity from the 9th largest economy and 6th largest city in the U.S. for nearly 30 years. This number basically doubled the highest points we’d seen following the pandemic shutdown we’d seen in the spring of 2020.
Fed Chair Jay Powell speaks publicly again later today, following yesterday’s press conference where he took a more dovish stance on inflation and the Fed’s reaction to it than many analysts were expecting. Well, today’s economic prints are a useful snapshot into what, no doubt, the Fed has been considering: while manufacturing growth is way up as the post-pandemic era becomes imminent, America’s unemployment situation is still a problem worth grappling with.
Market indexes are down at this point in today’s pre-market, threatening the Nasdaq’s three-day winning streak. We’ve seen a pause in the investment rotation from high-growth tech, especially companies that benefited from the “shelter in place” initiatives that began a year ago, into areas like Energy, Furniture and Travel & Leisure. With the 10-year bond rate climbing over 1.75% on its way to the Fed’s optimum 2%, investors are now wary of the Fed changing course, despite Powell’s assurances to the contrary.
Questions or comments about this article and/or its author? Click here>>
Zacks Top 10 Stocks for 2021
In addition to the stocks discussed above, would you like to know about our 10 best buy-and-hold tickers for the entirety of 2021?
Last year's 2020 Zacks Top 10 Stocks portfolio returned gains as high as +386.8%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
Access Zacks Top 10 Stocks for 2021 today >>