Pre-market futures are in the red in early morning trading this Thursday, still in the wake of yesterday afternoon’s Fed decision to increase interest rates another 25 basis points (bps) to their highest levels in 15 1/2 years. Yet once we saw a few economic prints hit the tape this morning, market indices have cut their losses notably: the Dow is -66 points at this hour, the Nasdaq -7 and the S&P 500 is -11 points at this hour.
Q1 Productivity was disappointingly low: -2.7% on headline from an expected -1.9%, and a big swing down from the +1.7% reported in Q4. This is not to be confused with Q1 GDP, which had already come in at +1.1%, so the negative number here is not necessarily to do with recessionary conditions. If anything, the productivity surge we saw in the initial hire-backs after the pandemic have now given way to less-productive job adds evening things out for now.
Unit Labor Costs for Q1 are the other side of this coin, and with an unexpectedly lower Productivity levels bring us higher labor cost numbers, and this we see here: +6.3% is above the +5.5% estimated, and nearly double the +3.2% reported in Q4. Again, these figures may represent something of a post-pandemic anomaly; in the wider scope, we appear to be meeting the pre-Covid trajectory on these data points.
Initial Jobless Claims reached 242K last week, more than the 236K anticipated and the downwardly revised 229K reported for the previous week. This is a “lower high” in this new jobless claims range going back to the first week of March or so, between 225K-250K per, whereas the week prior was a “higher low” in this same range. What’s clear is that we’ve reached a higher plane in jobless claims, largely due to a recalibration of data which began a month or so ago.
Continuing Claims of 1.805 million was notably lower than the slightly downwardly revised 1.843 million the previous week, basically matching where we’ve been in two of the previous six weeks, with the other prints either higher or lower: from 1.77 million on the low end to 1.86 million on the high. These figures were also subjected to a recalibration higher, though in both new and continuing claims, we remain in relatively healthy territory for the labor market. (Once we’re over 250K on new claims and +2 million on continuing, we may revisit this notion.)
Friday’s nonfarm payroll numbers and the overall Employment Situation from the U.S. government for April are expected to moderate, but remain within relatively healthy parameters: 180K consensus would be fewer jobs filled than the 236K reported in March, whereas the expected Unemployment Rate of 3.6% would mark the second-straight increase from the historic low 3.4% reported for February. These results are due before the opening bell tomorrow.
Finally, the U.S. Trade Balance (Deficit) for the month of March came in deeper than anticipated at -$64.2 billion, from the consensus -$63.1 billion analysts were expecting. Yet compared with the slightly revised -$70.6 billion, this is a downright improvement. Exports gained +2.3% while Imports reached only -0.3%. We’re currently slightly below the three-month moving average, but relatively in-line. We’re also thankfully below the -$105 billion+ prints we were seeing in our nightmares roughly a year ago. So, as in these other data points, we see overall improvement.
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Jobless Claims Come in Higher
Pre-market futures are in the red in early morning trading this Thursday, still in the wake of yesterday afternoon’s Fed decision to increase interest rates another 25 basis points (bps) to their highest levels in 15 1/2 years. Yet once we saw a few economic prints hit the tape this morning, market indices have cut their losses notably: the Dow is -66 points at this hour, the Nasdaq -7 and the S&P 500 is -11 points at this hour.
Q1 Productivity was disappointingly low: -2.7% on headline from an expected -1.9%, and a big swing down from the +1.7% reported in Q4. This is not to be confused with Q1 GDP, which had already come in at +1.1%, so the negative number here is not necessarily to do with recessionary conditions. If anything, the productivity surge we saw in the initial hire-backs after the pandemic have now given way to less-productive job adds evening things out for now.
Unit Labor Costs for Q1 are the other side of this coin, and with an unexpectedly lower Productivity levels bring us higher labor cost numbers, and this we see here: +6.3% is above the +5.5% estimated, and nearly double the +3.2% reported in Q4. Again, these figures may represent something of a post-pandemic anomaly; in the wider scope, we appear to be meeting the pre-Covid trajectory on these data points.
Initial Jobless Claims reached 242K last week, more than the 236K anticipated and the downwardly revised 229K reported for the previous week. This is a “lower high” in this new jobless claims range going back to the first week of March or so, between 225K-250K per, whereas the week prior was a “higher low” in this same range. What’s clear is that we’ve reached a higher plane in jobless claims, largely due to a recalibration of data which began a month or so ago.
Continuing Claims of 1.805 million was notably lower than the slightly downwardly revised 1.843 million the previous week, basically matching where we’ve been in two of the previous six weeks, with the other prints either higher or lower: from 1.77 million on the low end to 1.86 million on the high. These figures were also subjected to a recalibration higher, though in both new and continuing claims, we remain in relatively healthy territory for the labor market. (Once we’re over 250K on new claims and +2 million on continuing, we may revisit this notion.)
Friday’s nonfarm payroll numbers and the overall Employment Situation from the U.S. government for April are expected to moderate, but remain within relatively healthy parameters: 180K consensus would be fewer jobs filled than the 236K reported in March, whereas the expected Unemployment Rate of 3.6% would mark the second-straight increase from the historic low 3.4% reported for February. These results are due before the opening bell tomorrow.
Finally, the U.S. Trade Balance (Deficit) for the month of March came in deeper than anticipated at -$64.2 billion, from the consensus -$63.1 billion analysts were expecting. Yet compared with the slightly revised -$70.6 billion, this is a downright improvement. Exports gained +2.3% while Imports reached only -0.3%. We’re currently slightly below the three-month moving average, but relatively in-line. We’re also thankfully below the -$105 billion+ prints we were seeing in our nightmares roughly a year ago. So, as in these other data points, we see overall improvement.