Back to top

Image: Bigstock

GDP, Jobless Claims Higher Near-Term

Read MoreHide Full Article

Thursday, March 30, 2017

Ahead of the bell this morning — and a day before the final day of calendar Q1 — we see the final revision to Q4 Gross Domestic Product (GDP), as well as our weekly read of Initial Jobless Claims. Both were higher than expected: GDP rose 0.2% from the last read, and jobless claims stayed above our trailing average and came in at 258K.

GDP for the last quarter in 2016 has at last pushed past the 2% threshold, coming in at 2.1%. Stronger than the 1.9% in the second read, this is still representative of a sluggish economy chugging along in lieu of new economic imperatives — such as those proposed by President Trump’s campaign, which are still on a mission toward passage at some point in the future.

Initial Jobless Claims stated above the 225-250K range we’d “enjoyed” over the past couple months, coming in higher than expectations at 258K. Analysts had been looking for a fall back to within that range at 247K. Some of this may be explained by more out-of-work citizens actively looking for employment — though this will be clearer when we see the new BLS non-farm payroll report a week from tomorrow — but otherwise it must be chalked up to a lag in new employment in the early months of the year, which is common.

The 4-week moving average on jobless claims has also drifted above the (psychologically pleasing but otherwise less important) 250K for the week. Continuing claims bumped up on the week from a roughly even 2 million to 2.1 million this week. These are mild negatives for the U.S. labor market, but still in overall positive territory regarding the overall domestic economy.

Futures are down just slightly ahead of today’s opening bell: -1 on the S&P 500, -4 on the Dow and -1.5 on the Nasdaq. A deep drop in shares of Lululemon (LULU - Free Report) are down more than 21% following a weak forward guidance for the specialty retailer.

Mark Vickery
Senior Editor

Questions or comments about this article and/or its author? Click here>>