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Jobless Claims Cool Week Over Week; Pre-Markets Up

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Jobs Week continues this Thursday morning, following a relatively subdued JOLTS report Tuesday and a slimmer-than-expected ADP (ADP - Free Report) private-sector payrolls tally yesterday. Today it’s Initial Jobless Claims and Continuing Claims, and we remain consistent on results that do not look to inflame market sensibilities.

Headline Initial Claims came in at 220K, just below the 222K analysts were expecting — and exactly in-line with the average headline over the past six weeks (the six weeks prior averaged 207K new claims per week). Cycle highs came in a few weeks back, at 233K, but even this is well below the mid-summer 260K+ weeks we were seeing for a minute there. We haven’t been below 200K in close to a year, but we’re hovering around a generally healthy level of new jobless claims.

Continuing Claims has drawn much more attention of late, after seeing last week’s headline spike up north of 1.9 million; today’s number is back down to 1.861 million — still higher than prints we’ve seen over the past year, but perhaps showing resistance at these higher levels following nearly two months of higher longer-term claims every week. In fact, today was only the second week in the past 11 that was lower than the previous week.

Of course, the big news this Jobs Week is yet to come: tomorrow morning’s Employment Situation report is expected to bring in 190K new jobs for November. This is relatively high considering the muted labor market figures we’re seeing elsewhere, but that’s not to say it’s not an accurate estimate. The Unemployment Rate is expected to remain steady at 3.9%, an historically healthy figure. Hourly Wages year over year are expected to tick down to 4.0% last month.

Should these estimates be on the money, they would further the Goldilocks picture labor news has been painting over this Jobs Week. That said, markets over the past month or so — until recently: both the Dow and S&P 500 are on 3-day losing streaks — seem to have priced this in, which keeps the “soft landing” narrative in place. But whether investors will have an appetite to bid markets higher from here remains an open question.

Pre-market futures have improved since the jobless claims releases: the Dow and S&P are both up +14 points at this hour, while the Nasdaq has climbed +109 points. Only the small-cap Russell 2000 is marginally lower at this hour; it is the only index of the four to be up +2% over the past week of trading. With three weeks left of trading in 2023, the Russell is +5.36%, the Dow +8.53%, the S&P +18.80% and the Nasdaq — off an atypically dismal 2022 — is +45.31%.

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