Before we feast on turkey and stuffing Thursday with loved ones, we feast on economic data numbers this Wednesday morning, with prints normally reserved for Thursday pulled into pre-market activity a day ahead of the Thanksgiving holiday. With so many morsels from which to choose, it may be difficult to gauge whether this new data is positive overall. We can make an argument that it is.
The first big number that jumps out is the Initial Jobless Claims headline coming in sub-200K for the first time since prior to the pandemic: 199K — way down from the 260K analysts were expecting and the 270K reported the prior week. The one caveat here is that we are a day early with this print, and it’s tough to know whether all weekly claims were registered to the same degree as in a normal week. We’ll find out soon enough — if we’re back up in the mid-200Ks or higher a week from tomorrow, we’ll chalk up today’s figure to a holiday anomaly.
Continuing Claims keep their consistently lower weekly reads intact: 2.05 million is lower than the upwardly revised 2.11 million from the previous week, both of which represent subsequent post-Covid lows. It’s another sign that the U.S. labor market is overcoming the lag due to the Delta variant in key regions of the country (even as Delta asserts itself in unvaccinated pockets of the North now that colder weather is here) and making its way back to what the Fed would consider “full employment.”
The first revision on Q3 Gross Domestic Product (GDP) moved to +2.1%, solidifying a moderation analysts expected after the very hot +6.7% growth in Q2. Consumption — a very important aspect of American GDP — was a tick higher than expectations to +1.7%. The Price Index moved up to +5.9% from the +5.7% in the previous read, but here too we’re seeing prices cooling from previous historically high levels.
Durable Goods Orders for October sank a quite a bit lower than we were expecting: -0.5% from the expected gain of +0.3%. This is a preliminary read, subject to change, but are still down from the lower-revised -0.4% for September. However, strip out transportation (autos, aircraft) orders for the month and we’re right up to the +0.5% anticipated. Non-defense, ex-transportation durable goods orders (a proxy for “normal” business investment) came in at a healthy +0.6%. Blame this on the supply constraints continually hammering away at the auto sales market.
Advance Trade in Goods for October was a nice surprise down to the lowest monthly read in the lat 12 months: -$82.9 billion from the previous month’s revised expanded deficit to $97 billion. That’s good, because that -$97 billion represents an all-time depth of U.S. trade deficit. Inventories look to have been shored up a bit: double expectations on Wholesale to +2.2%; in-line on Retail to +2.1%. This is the metric that was a steady zero until the mid-1970s, and fell off a table at the start of the 21st century. We’re still near all-time high (or low, depending on your perspective) trade deficits.
Pre-market indexes are in a giving mood this morning, though not in a festive way: the Dow is -180 points at this hour, the S&P 500 is -25 and the Nasdaq is -100 points. November has been a softer month of trading overall, especially compared with the robust numbers we saw in October. A mild drift toward booking profits from record highs is definitely a big part of the weakness we’ve been seeing lately; late-year months are typically good for the stock market, and — as this morning’s vast amounts of data attests — our economy continues to rev along and make notable improvements.