As we mull through the current trading week like a toothpick through molasses - with the Dow having traded down 4 straight sessions and 9 of 11, while both the S&P 500 and Nasdaq are down in 2 of the last 3 regular trading days - we see some new key economic data. This is another feature of the current week: lots of econ grist for the mill, especially regarding jobs growth.
Tomorrow, as we know, is the monthly government non-farm labor report from the Bureau of Labor Statistics (BLS). Yesterday we saw another solid jobs number for April from the private-sector ADP ADP report, crossing the 200K-per-month new jobs trajectory yet again, which is extremely convincing of a peak labor market in the U.S. currently. Analysts currently expect 195K new jobs for last month overall, which would also keep this robust employment situation narrative in play.
Furthering this narrative is today's Initial Jobless Claims from last week, where we continually see new claims at low marks not realized since before Elvis wore a white jumpsuit. This morning's 211K headline was up 2000 claims from the previous week, but well below the already-strong range of 225-250K claims we'd been seeing the past few years. These are extraordinary times for the domestic labor force. Continuing claims were up a bit: from 1.833 million to 1.833 million - still well below the psychologically pleasing 2 million continuing claims per week.
Of course, tomorrow's BLS number will fill a lot of these gaps we still have, from the Unemployment Rate (4.1% last time) to "real unemployment," aka the U-6 (roughly 8%) to the all-important wage growth (2.7% year over year in last month's read). And if market stagnation we've witnessed this week is about more than just fears of a trade war - check out Zacks Senior Strategist Kevin Cook's excellent article from late yesterday here - then it might just be in tomorrow morning's BLS report.
We also see a new Productivity headline this morning, up 0.7% (lower than the 0.9% estimate, but higher than the previous read's +0.3%). Unit Labor Costs reached 2.7% last month, down from the expected 3.0%. While productivity is extremely important to the overall health of economic growth, unit labor costs point toward metrics leading to future inflation, thus higher interest rates sooner. We don't really have to worry about Fed rate policy, as the committee ended their latest conference yesterday without touching rates, but these numbers point down the road apiece.
Finally, March trade balance came out with a headline of a deficit of $49 billion, slightly better than the -$50 billion expected and down from the prior read (upwardly revised) of -$57.7 billion. Obviously less trade debt is better, but this is another metric that awaits whether the other shoe will drop regarding trade war speculation. Until we see something concrete on this subject, expect economists to underweight this figure in the near term.
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