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Jobless Claims Up, Consumption Down; Walgreens Down Big
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Thursday, June 27th, 2024
A slew of economic data is served to us this morning. Not only our usual Weekly Jobless Claims, but also Durable Goods, the final revision to Q1 GDP and an earnings report from a household American retailer. We’ll see Pending Home Sales out after the opening bell today (expected to moderate from the big dip a month ago). Upon these reports having been released, pre-market indices have improved slightly but remain in the red: the Dow -45 points, the S&P 500 -2 and the Nasdaq -25 points.
Initial Jobless Claims last week reached 233K. This is slightly below the 235K expected and a decent drop from the previous week’s slightly upwardly revised 239K, but still a measure above where these figures were landing for most of the first third of 2024 (through April). We’re gathering higher initial claims overall, just as we were last summer, so perhaps some if this is pure seasonality. The good news here is we’re down from the 243K in the first week of June, which was the highest print year to date.
Continuing Claims came in at their hottest level since November 2021. Reported a week in arrears from Initial Claims, we see 1.839 million longer-term jobless filings — a notable jump from the downwardly revised 1.821 million the previous week. This headline number would suggest more than just seasonality is in play here: we haven’t seen longer-term jobless claims this high in 2 1/2 years? And more than 400K higher than late 2022 lows? Yes — we are seeing job growth slowing, without a doubt.
By the way, a week from tomorrow brings us the big Employment Situation report. Last time around, we saw a still-high 270K new jobs filled in the economy, with an Unemployment Rate ticking up to +4.0%. These are still historically robust figures for the domestic labor force, but to the extent weekly jobless claims give a level of articulation on employment overall, we would have to assign a downward bias to employment numbers yet to come.
Q1 Gross Domestic Product (GDP) bumped up to +1.4% this morning. This is the second and final revision, as well as the lowest tally for economic growth since we last saw a negative final number back in Q2 2022 (which was also a technical recession, though the shortest possible type; Q1 ’22 was negative as well). From Q3 2023 strong +4.9% we’ve ratcheted down incrementally, much as the Fed had hoped with its “higher for longer” interest rate levels, which topped out in that very quarter and have remained at 5.25-5.50% ever since.
Consumption numbers came down in this final revision. Even though this is the third go-around, we see a half-point shaved off the total to +1.5% from +2.0%, and now registers as the slowest consumption growth since Q2 2023. The Price Index for May ticked up to +3.1% from +3.0% reported a month ago. We’ll see the full results from the Personal Consumption Expenditures (PCE) report tomorrow morning, but we can already see further evidence of the consumer spending less overall.
Durable Goods Orders for May swung to a positive for May. The +0.1% headline had been anticipated at -0.1%, with a big downward revision in April from +0.6% originally reported to +0.2% this morning. Ex-Transportation, we swing to a negative -0.1%, while there is no revision from the previous month’s +0.4%. Retail Inventories came up +0.7% and Wholesale Inventories +0.6% — both higher than expected — which are the lowest-quality types of economic growth.
Walgreens Boots Alliance (WBA - Free Report) is down again following its latest earnings report. This morning, the retail pharmacy and home goods conglomerate reported 63 cents per share, missing the Zacks consensus by 4 cents. Revenues, however, came in +1% stronger than estimates to $36.35 billion. However, the company also cut its fourth-quarter guidance basically in half (as the company plans to close a high number of stores), and shares are down -21% on this news, adding to the -40% drop year to date. For more on WBA’s earnings, click here.
Image: Bigstock
Jobless Claims Up, Consumption Down; Walgreens Down Big
Thursday, June 27th, 2024
A slew of economic data is served to us this morning. Not only our usual Weekly Jobless Claims, but also Durable Goods, the final revision to Q1 GDP and an earnings report from a household American retailer. We’ll see Pending Home Sales out after the opening bell today (expected to moderate from the big dip a month ago). Upon these reports having been released, pre-market indices have improved slightly but remain in the red: the Dow -45 points, the S&P 500 -2 and the Nasdaq -25 points.
Initial Jobless Claims last week reached 233K. This is slightly below the 235K expected and a decent drop from the previous week’s slightly upwardly revised 239K, but still a measure above where these figures were landing for most of the first third of 2024 (through April). We’re gathering higher initial claims overall, just as we were last summer, so perhaps some if this is pure seasonality. The good news here is we’re down from the 243K in the first week of June, which was the highest print year to date.
Continuing Claims came in at their hottest level since November 2021. Reported a week in arrears from Initial Claims, we see 1.839 million longer-term jobless filings — a notable jump from the downwardly revised 1.821 million the previous week. This headline number would suggest more than just seasonality is in play here: we haven’t seen longer-term jobless claims this high in 2 1/2 years? And more than 400K higher than late 2022 lows? Yes — we are seeing job growth slowing, without a doubt.
By the way, a week from tomorrow brings us the big Employment Situation report. Last time around, we saw a still-high 270K new jobs filled in the economy, with an Unemployment Rate ticking up to +4.0%. These are still historically robust figures for the domestic labor force, but to the extent weekly jobless claims give a level of articulation on employment overall, we would have to assign a downward bias to employment numbers yet to come.
Q1 Gross Domestic Product (GDP) bumped up to +1.4% this morning. This is the second and final revision, as well as the lowest tally for economic growth since we last saw a negative final number back in Q2 2022 (which was also a technical recession, though the shortest possible type; Q1 ’22 was negative as well). From Q3 2023 strong +4.9% we’ve ratcheted down incrementally, much as the Fed had hoped with its “higher for longer” interest rate levels, which topped out in that very quarter and have remained at 5.25-5.50% ever since.
Consumption numbers came down in this final revision. Even though this is the third go-around, we see a half-point shaved off the total to +1.5% from +2.0%, and now registers as the slowest consumption growth since Q2 2023. The Price Index for May ticked up to +3.1% from +3.0% reported a month ago. We’ll see the full results from the Personal Consumption Expenditures (PCE) report tomorrow morning, but we can already see further evidence of the consumer spending less overall.
Durable Goods Orders for May swung to a positive for May. The +0.1% headline had been anticipated at -0.1%, with a big downward revision in April from +0.6% originally reported to +0.2% this morning. Ex-Transportation, we swing to a negative -0.1%, while there is no revision from the previous month’s +0.4%. Retail Inventories came up +0.7% and Wholesale Inventories +0.6% — both higher than expected — which are the lowest-quality types of economic growth.
Walgreens Boots Alliance (WBA - Free Report) is down again following its latest earnings report. This morning, the retail pharmacy and home goods conglomerate reported 63 cents per share, missing the Zacks consensus by 4 cents. Revenues, however, came in +1% stronger than estimates to $36.35 billion. However, the company also cut its fourth-quarter guidance basically in half (as the company plans to close a high number of stores), and shares are down -21% on this news, adding to the -40% drop year to date. For more on WBA’s earnings, click here.
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