Thursday, September 1, 2022
Markets continue to dwindle downward in today’s pre-market, perhaps psychologically whammied that September — historically the worst month for the stock market — is upon us, along with fresh references from the Fed that they’re taking getting inflation back down to +2% is very serious. Add onto this new economic prints that were favorable but still send trading lower, and we’re faced with another troublesome day on Wall Street.
As with most every Thursday throughout the year, Initial Jobless Claims for last week dropped to 232K — the lowest level since the last week of June, and down from the 245K expected. Further, it amounts to 5000 fewer claims than the previous week’s 237K, which itself was downwardly revised from the originally posted 243K. All of this is good news; pre-market futures were -84 points on the S&P 500 prior to the release, -120 points directly afterwards.
Continuing Claims went the other direction, though they report a week in arrears from initial claims: 1.438 million is higher than the downwardly revised 1.41 million the previous week. Though if new claims are a forward indicator, we might expect lower longer-term claims by this time next week.
Also, this morning’s revision on Q2 Non-farm Productivity improved to -4.1% from an unrevised -4.6% originally posted and the -4.3% expected. Of course, it’s never good to have a negative quarterly productivity number, but this should surprise no one: Q2 GDP was negative, as well. At least we’re well off the Q1 lows of -7.4%, which was the worst quarterly print since 1947, the years productivity record-keeping began.
The other side of this ledger, Q2 Unit Labor Costs (revised), also notched some improvement: +10.2%, as opposed to the +10.6% initially registered, and 60 basis points better than the +10.8% we saw from the final Q1 total. Like with negative productivity, double-digit labor costs year over year are sub-optimum, but at least they’re pointing in the right direction.
This appears to be the parlor game we’re currently involved with: looking for signs inflation is coming down. It’s not like flipping a switch; incremental moves down the chart is the longer-term remedy. To whatever extent these take the proper steps cooler, the better we will eventually be. For right now, however, market participants are still rubbing their bruises after getting pummeled by a resilient Fed not ready to listen to prospects of easing monetary policy. Like, at all.
After today’s open, we’ll get both PMI and ISM Manufacturing results for the month of August, along with Construction Spending for July. As with the other economic reads we’ve seen this morning, we expect improvements but not miracles; incremental moves in the right direction are what we need to get used to. Namaste.
Questions or comments about this article and/or its author? Click here>>
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Econ Data Improves, Pre-Markets Stay Red
Thursday, September 1, 2022
Markets continue to dwindle downward in today’s pre-market, perhaps psychologically whammied that September — historically the worst month for the stock market — is upon us, along with fresh references from the Fed that they’re taking getting inflation back down to +2% is very serious. Add onto this new economic prints that were favorable but still send trading lower, and we’re faced with another troublesome day on Wall Street.
As with most every Thursday throughout the year, Initial Jobless Claims for last week dropped to 232K — the lowest level since the last week of June, and down from the 245K expected. Further, it amounts to 5000 fewer claims than the previous week’s 237K, which itself was downwardly revised from the originally posted 243K. All of this is good news; pre-market futures were -84 points on the S&P 500 prior to the release, -120 points directly afterwards.
Continuing Claims went the other direction, though they report a week in arrears from initial claims: 1.438 million is higher than the downwardly revised 1.41 million the previous week. Though if new claims are a forward indicator, we might expect lower longer-term claims by this time next week.
Also, this morning’s revision on Q2 Non-farm Productivity improved to -4.1% from an unrevised -4.6% originally posted and the -4.3% expected. Of course, it’s never good to have a negative quarterly productivity number, but this should surprise no one: Q2 GDP was negative, as well. At least we’re well off the Q1 lows of -7.4%, which was the worst quarterly print since 1947, the years productivity record-keeping began.
The other side of this ledger, Q2 Unit Labor Costs (revised), also notched some improvement: +10.2%, as opposed to the +10.6% initially registered, and 60 basis points better than the +10.8% we saw from the final Q1 total. Like with negative productivity, double-digit labor costs year over year are sub-optimum, but at least they’re pointing in the right direction.
This appears to be the parlor game we’re currently involved with: looking for signs inflation is coming down. It’s not like flipping a switch; incremental moves down the chart is the longer-term remedy. To whatever extent these take the proper steps cooler, the better we will eventually be. For right now, however, market participants are still rubbing their bruises after getting pummeled by a resilient Fed not ready to listen to prospects of easing monetary policy. Like, at all.
After today’s open, we’ll get both PMI and ISM Manufacturing results for the month of August, along with Construction Spending for July. As with the other economic reads we’ve seen this morning, we expect improvements but not miracles; incremental moves in the right direction are what we need to get used to. Namaste.
Questions or comments about this article and/or its author? Click here>>