It’s a veritable cornucopia of new economic prints ahead of today’s opening bell, less than a full day after the latest Fed funds interest rate hike, which brought its level to 4.25-4.50% (the first time over 4% in 15 years). The 50 bps hike was reduced for the first time in 5 months from +75 bps the previous 4 months. The dot-plot going forward does not see any 75 bps hikes on the horizon; the Fed’s actions in this regard have peaked.
Initial Jobless Claims came in below expectations: 211K was -20K lower than the previous week, and which was roughly expected. This is the lowest level in new jobless claims since the beginning of autumn; the holiday Retail and Warehouse industries may be distorting these claims a bit on routine seasonality, but it still speaks to healthy labor market conditions, as the Fed pointed out yesterday. Continuing Claims were flat at 1.67 million.
Retail Sales for November swung to a deeper negative number than expected this morning: -0.6% doubled the consensus -0.3%, and a big drop from October’s reported +1.3%. This is the lowest negative read since mid-summer and the overall weakest print since December of 2021. Furniture, Building Materials and Motor Vehicles all feel by more than -2% on the month, and Black Friday and Cyber Monday totals demonstrate weaker consumer spending of late.
Ex-motor vehicles, ex-autos and gas and the Control numbers all came in the same: -0.2% for last month, again the first negative levels since July of this year and the weakest numbers since December ’22. So even with these carve-outs, we’re still seeing relative weakness in retail sales — at least as of the early weeks of holiday shopping season. Likely we’re seeing further affects of higher interest rates from the Fed over time.
Empire State manufacturing for December dropped to its weakest levels since August, -11.2 (more than double the -0.5 expected), and another swing to the negative from November’s +4.5. The December Philly Fed read was an improvement month over month but still lower than expected: -13.8. The previous month’s -19.4 remains the lowest post of the past 12 months. Manufacturing demand looks to be eroding somewhat, as well.
This will be our business for the next few weeks of economic reports and, later, Q4 earnings season, which heats up mid-January. Plenty of data will have been released prior to the Fed’s next monetary policy decision on February 1st of next year. Currently the Fed is plotting a 5.00-5.25% Fed funds rate range, so unless the new numbers we get between now and then are particularly profound, we might expect a new hike at that meeting, as well.
Pre-market futures are lower on this morning’s data, with the Dow -350 points, the S&P 500 -50 and the Nasdaq -175 points. These add onto yesterday afternoon’s losses, when markets sank into the red after the Fed funds decision and longer, danker dot-plot were reported. We’ll get a new PCE report before Christmas, but most of the important economic news for our current month has already been reported.
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Jobless Claims Came in Below Expectations
It’s a veritable cornucopia of new economic prints ahead of today’s opening bell, less than a full day after the latest Fed funds interest rate hike, which brought its level to 4.25-4.50% (the first time over 4% in 15 years). The 50 bps hike was reduced for the first time in 5 months from +75 bps the previous 4 months. The dot-plot going forward does not see any 75 bps hikes on the horizon; the Fed’s actions in this regard have peaked.
Initial Jobless Claims came in below expectations: 211K was -20K lower than the previous week, and which was roughly expected. This is the lowest level in new jobless claims since the beginning of autumn; the holiday Retail and Warehouse industries may be distorting these claims a bit on routine seasonality, but it still speaks to healthy labor market conditions, as the Fed pointed out yesterday. Continuing Claims were flat at 1.67 million.
Retail Sales for November swung to a deeper negative number than expected this morning: -0.6% doubled the consensus -0.3%, and a big drop from October’s reported +1.3%. This is the lowest negative read since mid-summer and the overall weakest print since December of 2021. Furniture, Building Materials and Motor Vehicles all feel by more than -2% on the month, and Black Friday and Cyber Monday totals demonstrate weaker consumer spending of late.
Ex-motor vehicles, ex-autos and gas and the Control numbers all came in the same: -0.2% for last month, again the first negative levels since July of this year and the weakest numbers since December ’22. So even with these carve-outs, we’re still seeing relative weakness in retail sales — at least as of the early weeks of holiday shopping season. Likely we’re seeing further affects of higher interest rates from the Fed over time.
Empire State manufacturing for December dropped to its weakest levels since August, -11.2 (more than double the -0.5 expected), and another swing to the negative from November’s +4.5. The December Philly Fed read was an improvement month over month but still lower than expected: -13.8. The previous month’s -19.4 remains the lowest post of the past 12 months. Manufacturing demand looks to be eroding somewhat, as well.
This will be our business for the next few weeks of economic reports and, later, Q4 earnings season, which heats up mid-January. Plenty of data will have been released prior to the Fed’s next monetary policy decision on February 1st of next year. Currently the Fed is plotting a 5.00-5.25% Fed funds rate range, so unless the new numbers we get between now and then are particularly profound, we might expect a new hike at that meeting, as well.
Pre-market futures are lower on this morning’s data, with the Dow -350 points, the S&P 500 -50 and the Nasdaq -175 points. These add onto yesterday afternoon’s losses, when markets sank into the red after the Fed funds decision and longer, danker dot-plot were reported. We’ll get a new PCE report before Christmas, but most of the important economic news for our current month has already been reported.