Lots of new economic data hit the tape ahead of today’s opening bell, in a week without a lot of pivot points with which to draw a new definitive direction. Not only jobless claims, as we get every Thursday morning, but also Durable Goods Orders, a Q1 GDP revision and Personal Consumption Expenditures help give investors — as well as the Fed — a focused glimpse at how our economy is moving.
Let’s start with the first revision to Q1 Gross Domestic Product (GDP), which reached the same conclusion as the initial release: +6.4%. There were murmurs on the Street that this number may have adjusted higher upon revision, but 6.4% is nothing to sneeze at. The third and final read will come out as initial Q2 prints begin to file in.
Personal Consumption Expenditures (PCE) — perhaps the single-most important economic metric influencing the Fed’s decisions on interest-rate policy — jumped to 11.3 from its initial read of 10.7, reaching 3.7% on the pricing index. PCE core, quarter over quarter, came in at 2.5% (2.3% was the consensus estimate). These are strong growth numbers, though notably off the 3.4% PCE pricing seen in Q3 of last year.
Preliminary Durable Goods Orders for April swung to a disappointing -1.3% from the expected +0.9%. However, when we strip out volatile transportation durables, we see this pop back up to +1.0%. Subtracting orders in the Defense industry, the figure is unchanged. But in the non-Defense, ex-aircraft read — a proxy for “normal” business investment — we see a jump to +2.3%, which is indicative of a strong and strengthening economy. Shipments vs. orders were in-line at +0.9%.
Last but not least, Initial Jobless Claims continue to ratchet down to new pandemic lows: 406K was a nice drop from the unrevised 444K the previous week. We are tantalizingly close to breaking through the floor of the 400Ks — maybe next week? In any case, it’s a sizable journey downward from the 765K reported for the second week of March. A year ago at this time, we were well above 1.5 million new weekly jobless claims.
Continuing Claims, reported a week in arrears, also came down: 3.64 million was another step lower from the 3.75 million reported the previous week. While not technically the lowest we’ve seen since the pandemic era began, we are nevertheless is a long valley from the large slopes we saw a year ago, prior to Pandemic Unemployment Assistance (PUA) passed through Congress to help slow the bleeding of a badly damaged labor market.
Market indexes have improved in today’s pre-market following these economic prints. Whether their meanings have all been automatically absorbed upon impact may be in doubt, investors likely are seeing growth advancing in measured, less-than-erratic ways.
The Dow was up 80 points before the data but now looks to open 150 points, the S&P 500 has swung to positive futures, -4 points to +4 points, and the Nasdaq, which had been expected to open -70 points this morning, has nearly cut this deficit in half.
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Initial Jobless Claims Hit New Pandemic Low
Lots of new economic data hit the tape ahead of today’s opening bell, in a week without a lot of pivot points with which to draw a new definitive direction. Not only jobless claims, as we get every Thursday morning, but also Durable Goods Orders, a Q1 GDP revision and Personal Consumption Expenditures help give investors — as well as the Fed — a focused glimpse at how our economy is moving.
Let’s start with the first revision to Q1 Gross Domestic Product (GDP), which reached the same conclusion as the initial release: +6.4%. There were murmurs on the Street that this number may have adjusted higher upon revision, but 6.4% is nothing to sneeze at. The third and final read will come out as initial Q2 prints begin to file in.
Personal Consumption Expenditures (PCE) — perhaps the single-most important economic metric influencing the Fed’s decisions on interest-rate policy — jumped to 11.3 from its initial read of 10.7, reaching 3.7% on the pricing index. PCE core, quarter over quarter, came in at 2.5% (2.3% was the consensus estimate). These are strong growth numbers, though notably off the 3.4% PCE pricing seen in Q3 of last year.
Preliminary Durable Goods Orders for April swung to a disappointing -1.3% from the expected +0.9%. However, when we strip out volatile transportation durables, we see this pop back up to +1.0%. Subtracting orders in the Defense industry, the figure is unchanged. But in the non-Defense, ex-aircraft read — a proxy for “normal” business investment — we see a jump to +2.3%, which is indicative of a strong and strengthening economy. Shipments vs. orders were in-line at +0.9%.
Last but not least, Initial Jobless Claims continue to ratchet down to new pandemic lows: 406K was a nice drop from the unrevised 444K the previous week. We are tantalizingly close to breaking through the floor of the 400Ks — maybe next week? In any case, it’s a sizable journey downward from the 765K reported for the second week of March. A year ago at this time, we were well above 1.5 million new weekly jobless claims.
Continuing Claims, reported a week in arrears, also came down: 3.64 million was another step lower from the 3.75 million reported the previous week. While not technically the lowest we’ve seen since the pandemic era began, we are nevertheless is a long valley from the large slopes we saw a year ago, prior to Pandemic Unemployment Assistance (PUA) passed through Congress to help slow the bleeding of a badly damaged labor market.
Market indexes have improved in today’s pre-market following these economic prints. Whether their meanings have all been automatically absorbed upon impact may be in doubt, investors likely are seeing growth advancing in measured, less-than-erratic ways.
The Dow was up 80 points before the data but now looks to open 150 points, the S&P 500 has swung to positive futures, -4 points to +4 points, and the Nasdaq, which had been expected to open -70 points this morning, has nearly cut this deficit in half.