There was high drama around Thursday’s jobless claims update in the US.
The justification for a lot of overwrought financial media hype (Andrew Ross Sorkin mused about a “jobless claims nail-biter” producing a “white-knuckle session” on Wall Street) went as follows. A US recession scare and suddenly higher hard landing odds were just as much to blame for recent market tumult as any carry trade unwind and besides, softer US labor market data perpetuated that unwind by stoking additional yen appreciation. If Thursday’s jobless claims update offered more evidence of a hiring slowdown across the world’s largest economy, it’d be adiós, muchachos.
There’s a lot of truth to that narrative. But there was another reason Thursday’s US jobless claims release garnered a lot of attention: There isn’t anything else on the docket from now until Tuesday, unless you count a long bond auction. “The jobless claims print will mark the last fundamental input ahead of the weekend,” BMO’s Ian Lyngen remarked. “There are no relevant data releases on Friday nor Monday — and it’s the middle of August.”
So, it was left to claims to stoke more mayhem. Or not. The headline initial filers print for the week ended August 3 was 233,000, down 17,000 from the prior week and below estimates. Womp, womp, I know. It would’ve been “better” had claims spiked, consistent with the recession warning from the Sahm siren. No such “luck.”
Consensus for Thursday’s headline was 249,000. The prior week’s print, already the highest in a year, was revised up by 1,000 to 250,000.
The four-week moving average is now 240,750. That’s the highest since August 26 of last year, which is to say the trend’s still up.
Continuing claims, meanwhile, rose again, printing 1.875 million. That was marginally higher than expected.
It’s worth noting that the prior week was revised lower. In fact, the preliminary tally for the week to July 27 (i.e., Thursday’s print) was actually below the first estimate of the prior week’s ongoing filers total. So, had that prior not been revised lower, continuing claims would’ve fallen this week.
As the figure shows, the continuing claims series continues to grind higher, marking new “since 2021” levels pretty much on a weekly basis.
Anyway, Thursday’s lone US macro release wasn’t the dramatic event it could’ve been. That’s a “disappointment.” If you’re the type who revels in other people’s economic misery.
The article had a graphic that was simply photograph. Compared to the amazingly dramatic artwork you’ve been doing., I will be very happy with this good boring. Hopefully the rest of August will see your artworks being boring photographs, and balloons. I doubt it. I think you have too much fun with your graphics.
Yes! I think Mr H might just be the best AI whisperer (artist?) on the net. I wanted to start a conspiracy theory about the graffiti (the letters ROPF on a building) in the amazing graphic for the “Japan Apologizes” article. Just for fun, of course. Maybe too off topic for a cerebral site. Or maybe H can add in some ‘Easter eggs’ in his pics, like the movie buffs enjoy.
The talking heads did not have much this week, so the importance of this release was higher than usual. Next week has more.
It is interesting that the Fed’s use of the term “data dependent” has significantly increased volatility in the equity and fixed income markets. Now the market moves on a simple weekly data release.
The poor junior journalists who have to explain the recent price “fluctuations” through the traditional lenses. So today it’s “Dow up 500 points as jobless-claims data soothe recession fears”.
The actual headline should have read “Dow up 500 points as volatility measures decline”.
I can sympathize with them. Less so market pros who do not understand the influence of vol-driven algos on shorter-term price action. Or, perhaps, they don’t want to acknowledge that their skills and experience are becoming less & less valuable.
H-Man, next week portends to bring answers as we respond as well conditioned Pavlovain dogs.