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Economic Data Deluge

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Here we are, the day before our Thanksgiving feast, with a feast of our own — of economic data. Ahead of the bell, we see plenty of figures to sink our collective teeth into, and after regular trading begins we’ll also see Personal Income and Consumer Spending, Core Inflation, Pending Home Sales and a new Beige Book.

The first revision of Q3 Gross Domestic Product (GDP) came in stronger than expected: 2.1% versus the initial read of 1.9%. Aside from the positive psychological impact of climbing back up to a “2-handle,” the fact that the Personal Consumption read performed better than expected to 2.9% means the consumer continues to drive the bus for the U.S. economy. Personal Consumption Expenditures (PCE) core, quarter over quarter, came in slightly below expectations, also at 2.1%.

Durable Goods for October swung to a positive number, to +0.6%, from the estimated -1.1%, as well as the downwardly revised -1.4% reported for September. Stripping out Transportation, the result is the same: +0.6%. Ex-Defense, this number is reduced to +0.1%. But Core Capital Expenditures, non-Defense, ex-Aircraft came in at +1.2%.

What these numbers ping-ponging everywhere are pointing out is that, at least temporarily, we are seeing a rebound in orders for dishwashers, laundry dryers, etc., while still mired in a trade war with China. Again returning to the idea of the consumer running the show, apparently pent-up demand for hard goods is showing up in this morning’s data.

Initial Jobless Claims, normally a Thursday-morning staple moved up a day for Thanksgiving week, fell back down to the long-term, historically low range between 200K-225K to 213K last week. This follows a slight upward revision the previous week, which now stands at 228K. 

Analysts who’ve been following the narrative of “peak employment” have been keeping an eye on whether deterioration in weekly jobs numbers had arrived, and the 228K figure seemed to point that way. But falling back down to the middle of the historically low range will set these analysts’ minds at ease, at least for another week.

Continuing Claims reported this morning, taken from the week prior to the Initial Jobless claims numbers, also came down: 1.64 million long-term claims was also back down toward 50-year lows, after creeping up toward 1.7 million — which itself is on the historically low side. No worries on the weekly employment side yet again. Cheers to that!

We here at Zacks & Co. wish everyone a very happy and safe Thanksgiving celebration. We’re thankful for everyone’s support, and for a 2019 that has handily rebounded from a rather dismal 2018. May the good times continue!