Thursday, June 20th, 2024

We come back refreshed from the Juneteenth holiday this morning with more economic data. A lot more economic data. From the labor market to homebuilding figures to regional manufacturing and a new account balance, we fill in a lot of gaps ahead of today’s opening bell. Pre-market futures were in the green ahead of this onslaught of data, and remain so afterward — though they seem to be dwindling a bit.

Initial Jobless Claims moderated week over week. A headline 238K was slightly above estimates for 235K, but down from the prior week’s upwardly revised 243K, which is now the highest print we’ve seen since last August. We spent from last fall to this spring with new jobless claims sub-220K in all but a few select weeks, which was an historically robust employment period. We’re now notably above this, but appear to only have buoyed back to where we were last summer.

Continuing Claims are reported a week in arrears from new claims. Thus, we tend to see last week’s initial claims data reflected in this week’s Continuing Claims, and this woulds stand to reason: a headline 1.828 million longer-term jobless claims is the highest single-week level we’ve seen since November of 2021. This follows a slightly downwardly revised 1.813 million — the first time we’ve seen back-to-back 1.8 million prints since the first week of February.

Housing Starts for May missed expectations. A total of 1.277 million seasonally adjusted, annualized units is the lowest tally we’ve seen since June of 2020 — right in the heart of the Covid pandemic. It’s lower than the 1.38 million analysts were expecting, and notably below the 1.5 million or so housing starts we’d been seeing over the last few years. Single-family housing starts fell -5.2% for the month, down nearly -2% year over year. Mortgage rates in May remained above 7%, and homebuilder sentiment has fallen in May (and June, as of yesterday’s survey).

Building Permits, also for May, hit lows not seen since June 2020, as well. Headline 1.386 million was well off the expected pace of 1.45 million seasonally adjusted, annualized units. Building Permits are a good gauge of future Housing Starts, so weakness on this metric does not bode well for a bounce-back a month from now on new starts. Oversupply in the multi-family space has led to a -52% drawdown in starts year over year, and we’re not seeing permits doing much heavy lifting as of now.

The latest Philly Fed manufacturing survey, for June, is also out this morning. It’s +1.3 is below the +5.0 analysts had been anticipating, and the unrevised +4.5 reported for the previous month, but it does make the fifth month in a row of positive Philly Fed numbers, following five negative months in a row prior. A year ago, Philly Fed registered a -13.6, bottoming out before that in April of last year at -26.3 — the lowest read we’d seen since plummeting during Covid.

Finally, the Q1 U.S. Current Account data is released this morning. This fell to -$237.6 billion, far lower than the -$207.4 billion anticipated and the downwardly revised -$221.8 billion the prior month. Over the past five years, the deepest cut to the U.S. account came back in Q1 of 2022, when it reached -$291.8 billion, which is also an all-time low. We’d like to see this flow back the other direction, but there isn’t much that will be directly impacted by this drop in the near-term economy.

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