Good news this morning for the bulls. Initial jobless claims came in roughly in-line at 608K, but more importantly, continuing claims fell substantially to 6.68MM. The unemployment rate for uninsured workers also fell to 5% in what could be the first signs of a peak in the overall unemployment rate. Of course, it’s important to keep things in perspective. These are still massively destructive numbers across the board. 600K+ claims and nearly 7MM continuing claims simply cannot be misconstrued as a positive, though we could be seeing some signs of marginal improvement.
Leading indicators came in better than expected at 1.2%. Unfortunately, these figures have become a relatively unreliable leading indicator due to some of their lagging components. Equity markets and the steepening yield curve contributed substantially to this month’s gains.
This morning’s Philly Fed numbers were much better than expected at -2.2 compared to expectations of -15. While this is a good near-term sign for manufacturing it’s important to note that this is a very volatile figure and not necessarily the best indicator of future manufacturing expansion. ISM remains the go to figure and we’re still seeing sharp contraction across the board in the ISM.