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Economic Data Deluge

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Pre-market futures continue to fill in gaps from recent lows over the past several weeks, and currently we may be looking at market indexes’ first up-week in the past month and a half. And ahead of this morning’s open, we see prominent economic data posting decent numbers that should keep current sentiment where it is — up 3% since June began, after losing 6% in the month of May.

Initial Jobless Claims could not have remained steadier: 218K last week, exactly in-line with the previous week, which was revised up 3000 claims from its original read. This is solidly in the middle of the 200-225K new claims range we’ve seen through most of this historic job growth cycle.

Continuing Claims rose a tad, from 1.662 million last reported to 1.682 million this morning. (These figures are a week in arrears from new claims, so the 1.662 million is from two weeks ago.) These numbers remain close to 50-year lows in long-term jobless claims, again illustrating a robust U.S. labor market that shows no signs of quitting.

It’s wage growth that’s the biggest concern in domestic employment, and we will get a close look at how this has developed when the U.S. government’s non-farm payrolls for May are released tomorrow. For a country with an Unemployment Rate of 3.6% (on the last read), wages are only growing at barely 3% year over year. This is a good thing in terms of keeping rampant inflation at bay, but speaks to a lower ceiling of earnings for lots of employed Americans.

The Trade Balance for April has also been released this morning, with results also very much in-line with expectations: a deficit of $50.8 billion comes in a tad lower than the $50.5 billion anticipated. The March read was revised down from -$50 billion last time around to -$51.9 billion this morning.

Trade deficits, which had routinely brought in a zero balance month over month up until the late 1970’s, began to rapidly recede in the ’90s and ’00s, and bottomed out shortly before the financial crisis which led to the Great Recession. The closest we’ve come to these lows recently was back in December, when the trade deficit touched -$60 billion.

The final read on Q1 Productivity slipped a tad to +3.4%, down from the 3.6% we saw last time around. Unit Labor Costs for Q1 dipped to -1.6%, 50 basis points below expectations. This figure is also down from the -0.9% reported a month ago.

Further bolstering positive sentiment this morning is an ongoing presentation from European Central Bank (ECB) President Mario Draghi, where a somewhat surprising dovish tone on interest rates have taken European indexes up to session highs. Draghi has essentially delayed any new rate hikes until mid-next year at the earliest — 6 months later than global investors had been expecting.