Thursday, June 9, 2022
This Thursday morning, like most Thursday mornings, bring us new weekly jobless claims. Headline Initial Jobless Claims actually came up to their highest point since mid-January: 229K, marking 5 of the past 6 weeks above 200K. This may have some psychological significance, but anything below 250K is still consistent with a strong labor market overall.
We do, however, appear to be off the lows of the cycle, which came mid-March through early April, when post-Omicron hiring and summer inventories were coming in — to say nothing of gas prices still relatively low only a few weeks into Russia’s invasion of Ukraine. Will we get below 200K again any time in the near future? It doesn’t really look like it.
Continuing Claims, on the other hand, establish a new multi-decade low at 1.306 million — exactly in-line with the downwardly revised 1.306 million the previous week, which harken back to the late 1960s the last time we saw longer-term unemployment this low. Because continuing claims are one week in arrears from new claims, we’ll hold off judgment for now whether Americans losing their jobs are able to find new ones right away — although from this vantage point, it would appear so.
This morning also brings us results from the CFO Council Survey for 2022. In it, we see where the focus and main concerns are for business executives, and here we notice plenty of agreement among Chief Financial Officers, as surveyed by Richmond and Atlanta Feds:
A full 100% of CFOs surveyed believe the U.S. economy is headed for a recession at some point in the next two years, with 68% of those polled expecting it to come in the first half of 2023. The survey — which was sampled between May 12 and June 6 — is reflective of issues we’ve seen over the past six weeks: 41% see inflation as the top risk to their company’s progress; 77% see the Dow index slipping back under 30K.
Keep in mind two things related to the timing of this survey: 1) CPI for April had just come out, reported at +8.3% and staggering market participants com ing to terms with “higher inflation longer,” and Russian President Putin had just committed himself to long-term war in Ukraine. Both of these news items likely colored CFO opinions to the negative side at the time.
Pre-market activity is flattish, with a distinct downward bias: both the Dow and the Nasdaq are down -65 points at this hour, while the S&P 500 is -15 points. The big econ report that will likely determine a positive or negative trading outcome this week is tomorrow morning’s Consumer Price Index (CPI) for May. Monthly, we’re looking at +0.7% on headline, +8.2% year over year; core expectations are +0.5% and +5.9%, respectively.
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Initial Jobless Claims Up to January Levels: 229K
Thursday, June 9, 2022
This Thursday morning, like most Thursday mornings, bring us new weekly jobless claims. Headline Initial Jobless Claims actually came up to their highest point since mid-January: 229K, marking 5 of the past 6 weeks above 200K. This may have some psychological significance, but anything below 250K is still consistent with a strong labor market overall.
We do, however, appear to be off the lows of the cycle, which came mid-March through early April, when post-Omicron hiring and summer inventories were coming in — to say nothing of gas prices still relatively low only a few weeks into Russia’s invasion of Ukraine. Will we get below 200K again any time in the near future? It doesn’t really look like it.
Continuing Claims, on the other hand, establish a new multi-decade low at 1.306 million — exactly in-line with the downwardly revised 1.306 million the previous week, which harken back to the late 1960s the last time we saw longer-term unemployment this low. Because continuing claims are one week in arrears from new claims, we’ll hold off judgment for now whether Americans losing their jobs are able to find new ones right away — although from this vantage point, it would appear so.
This morning also brings us results from the CFO Council Survey for 2022. In it, we see where the focus and main concerns are for business executives, and here we notice plenty of agreement among Chief Financial Officers, as surveyed by Richmond and Atlanta Feds:
A full 100% of CFOs surveyed believe the U.S. economy is headed for a recession at some point in the next two years, with 68% of those polled expecting it to come in the first half of 2023. The survey — which was sampled between May 12 and June 6 — is reflective of issues we’ve seen over the past six weeks: 41% see inflation as the top risk to their company’s progress; 77% see the Dow index slipping back under 30K.
Keep in mind two things related to the timing of this survey: 1) CPI for April had just come out, reported at +8.3% and staggering market participants com ing to terms with “higher inflation longer,” and Russian President Putin had just committed himself to long-term war in Ukraine. Both of these news items likely colored CFO opinions to the negative side at the time.
Pre-market activity is flattish, with a distinct downward bias: both the Dow and the Nasdaq are down -65 points at this hour, while the S&P 500 is -15 points. The big econ report that will likely determine a positive or negative trading outcome this week is tomorrow morning’s Consumer Price Index (CPI) for May. Monthly, we’re looking at +0.7% on headline, +8.2% year over year; core expectations are +0.5% and +5.9%, respectively.
Questions or comments about this article and/or its author? Click here>>