Truly remarkable, these Initial Jobless Claims. Week after week we see a further melting of the American populace in need of a payout while seeking a new job. During the digging out from the Great Recession, a hotly anticipated sub-300K jobless claims headline was sought for getting traction in the U.S. labor market. Those days are long gone.
Last week, Initial Jobless Claims reached a near-49-year low to 201K — down another 3000 claims from the previous week’s slightly upwardly revised 204K and 213K from the previous week. Just a few months ago, claims dipped into an almost unheard-of range of 200-225K. Now claims look to break through the 200K floor, which was predicted in this column exactly one week ago: Jobless Claims Headed to Sub-200K
Continuing Claims also fell to a previously unfathomable depth to 1.645 million. This is solidly down another notch to a range of 150K-175K, and 175K was previously considered a pipe dream as well. All in all, these are the lowest jobless claims numbers since Robert Redford was distinguishing himself as America’s newest cinematic heartthrob.
Keep in mind that we fully expect a disruption to temporarily knock claims off their rapid downhill course when the impact of Hurricane Florence manifests itself in the economy of the coastal Carolinas. Not only livestock losses and people still removed from their places of residence due to massive flooding in the region, but also retailers, restauranteurs, etc. are expected to lighten their loads in terms of workforce until things can return to (almost) normal. Hopefully we’ve seen the end of hurricanes making landfall in the U.S. for another season, although we’re currently only about halfway through it right now.
The Philly Fed survey came in hotter than expected ahead of today’s opening bell, as well, reporting a 22.9 headline that was well above the 15 expected. This figure was practically only half the size a year ago, 11.9. This indicates the municipality of Philadelphia — still a top-ten American city in terms of population and commerce — is performing more strongly than estimates had indicated. These tend to be volatile numbers month over month, but hey — we’ll still take it.
After the market opens today, we also expect to see new data on Existing Home Sales, Leading Economic Indicators (both for August) and Q2 Household Debt. Existing home Sales are expected to tick up from July’s 5.34 million, Econ Indicators follow a 0.6% read last time around, and Household Debt tallied +3.3% when this report last hit the tape.
None of these figures are expected to make a dent in the possibility the Fed will raise interest rates another 25 basis points next week, to a 2.00-2.25% rate that hasn’t been this high since the Recession hit. Not only is there a 100% chance (among interviewed analysts) that this hike is coming, but in the December session there is currently an 80% chance the Fed moves to 2.25-2.50% going into 2019.
It seems the 10-year treasury bill is now reflecting this inevitability: up to 3.1% in the pre-market today, plenty of bond watchers will expect new 52-week highs in the 10 year as rates rise and the the economy — including this truly remarkable domestic labor market. Even the Sundance Kid would have been impressed.
Image: Bigstock
Initial Claims Lowest In About 49 Years
Truly remarkable, these Initial Jobless Claims. Week after week we see a further melting of the American populace in need of a payout while seeking a new job. During the digging out from the Great Recession, a hotly anticipated sub-300K jobless claims headline was sought for getting traction in the U.S. labor market. Those days are long gone.
Last week, Initial Jobless Claims reached a near-49-year low to 201K — down another 3000 claims from the previous week’s slightly upwardly revised 204K and 213K from the previous week. Just a few months ago, claims dipped into an almost unheard-of range of 200-225K. Now claims look to break through the 200K floor, which was predicted in this column exactly one week ago: Jobless Claims Headed to Sub-200K
Continuing Claims also fell to a previously unfathomable depth to 1.645 million. This is solidly down another notch to a range of 150K-175K, and 175K was previously considered a pipe dream as well. All in all, these are the lowest jobless claims numbers since Robert Redford was distinguishing himself as America’s newest cinematic heartthrob.
Keep in mind that we fully expect a disruption to temporarily knock claims off their rapid downhill course when the impact of Hurricane Florence manifests itself in the economy of the coastal Carolinas. Not only livestock losses and people still removed from their places of residence due to massive flooding in the region, but also retailers, restauranteurs, etc. are expected to lighten their loads in terms of workforce until things can return to (almost) normal. Hopefully we’ve seen the end of hurricanes making landfall in the U.S. for another season, although we’re currently only about halfway through it right now.
The Philly Fed survey came in hotter than expected ahead of today’s opening bell, as well, reporting a 22.9 headline that was well above the 15 expected. This figure was practically only half the size a year ago, 11.9. This indicates the municipality of Philadelphia — still a top-ten American city in terms of population and commerce — is performing more strongly than estimates had indicated. These tend to be volatile numbers month over month, but hey — we’ll still take it.
After the market opens today, we also expect to see new data on Existing Home Sales, Leading Economic Indicators (both for August) and Q2 Household Debt. Existing home Sales are expected to tick up from July’s 5.34 million, Econ Indicators follow a 0.6% read last time around, and Household Debt tallied +3.3% when this report last hit the tape.
None of these figures are expected to make a dent in the possibility the Fed will raise interest rates another 25 basis points next week, to a 2.00-2.25% rate that hasn’t been this high since the Recession hit. Not only is there a 100% chance (among interviewed analysts) that this hike is coming, but in the December session there is currently an 80% chance the Fed moves to 2.25-2.50% going into 2019.
It seems the 10-year treasury bill is now reflecting this inevitability: up to 3.1% in the pre-market today, plenty of bond watchers will expect new 52-week highs in the 10 year as rates rise and the the economy — including this truly remarkable domestic labor market. Even the Sundance Kid would have been impressed.