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Jobless Claims Fall 12th Straight Week to 1.48 Million

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Thursday, June 25, 2020

New Initial Jobless Claims were released this morning, as they are just about every Thursday, and marked the 12th straight decline in new claims. That’s the good news.

The bad news? The headline for new claims came in at 1.48 million for the week. This is down from the upwardly revised 1.54 million the previous week, but about 100K more than had been expected. It is also the 14th straight week we’ve seen initial claims well above a million claims, and this brings total new claims since the week of March 21 this year to a whopping 47.3 million.

Continuing Claims also showed improvement, dipping beneath 20 million for the first time in many weeks, to 19.522 million. This follows a slightly downwardly revised 20.289 million. Again, while it’s nice to see these trajectories going in the right direction, we’re still way down the well on U.S. labor.

Next week today, we’ll get a new non-farm payroll report for June. This will follow the May numbers which puzzled analysts when they depicted jobs growth, which can be found in no other employment data from that period. We thus expect a big downward revision for May, as well as June employment figures not quite so flattering as what we saw 4 weeks ago.

Durable Goods Orders for May surprised to the upside this morning, with +15.8% reversing the downwardly revised -18.1% reported for April. That -18.1% figure is near — but not quite — an all-time low -18.4%, which we saw as the bottom fell out during the financial crisis that led to the Great Recession in 2009. Ex-Defense, May’s figure reached +15.5%, indicating the robust bounce-back is not the result of a few big-ticket items ordered in the month.

Core Capital Goods Orders — non-Defense, ex-aircraft (a proxy for general business investment) — also swung to a positive in May: +2.3% outperformed expectations by 200 basis points, and zoomed way ahead of April’s -6.1%. This figure, more than any other reported this morning, may give the most reassurance that the rebounding economy is happening on terra firma.

Trade in Goods for May, on the other hand, came in much lower than had been anticipated: -$74 billion was worse than the -$66.5 billion expected and the -$69.7 billion reported for April. Inventories came down 1.2% last month, whereas Retail fell 6.1% — both were three times worse than analysts had been predicting.

Market indexes are continuing to swim through red ink this morning, after the worst trading day for the month on Wednesday. With COVID-19 cases continuing to escalate in various regions in the U.S., it is casting a shadow of doubt over the market’s perceived “V-shaped recovery.” That said, markets are well off the lows we saw in the early parts of the “stay at home” pandemic crisis; for now, we mostly see investors merely booking profits and seeking value.

Mark Vickery
Senior Editor

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