Jobless Claims, Q4 GDP Dip; Durable Goods Soar +3.4%

Thursday, February 25, 2021

New Initial Jobless Claims numbers are out this Thursday morning, as nearly every Thursday, with numbers far lower than expected and week over week: 730K new jobless claims were made last week, way down from the 845K projected. It’s also a whopping 111K lower than the previous month’s downwardly revised 841K. These are still historically high numbers overall, but toward the lower end of the current cycle, and a welcome sight.

Continuing Claims, reported for the prior week, came in at 4.42 million — a more than 100K drop from the upwardly revised 4.52 million the week previous. Unlike Initial Claims, which shows a rather volatile 12-week chart, Continuing Claims have generated a steady stream downward. Of course, much of this has to do with workers expiring on longer-term claims moving over to Pandemic Unemployment Assistance (PUA), which took in another million Americans two weeks ago.

One caveat to these weekly numbers was foreseen ahead of time by analysts: weather conditions in much of the country, especially in hard-hit Texas, look to have affected these figures to the downside temporarily. Thus, while we see relatively strong jobless claims numbers this week, we might expect either an upward revision next week, higher-than-normal headline numbers, or both. Currently, 19 million Americans claim some sort of unemployment insurance.

The first revision to Q4 Gross Domestic Product (GDP) was also released ahead of today’s opening bell, dipping 10 basis points to 4.1%. It was still a good effort to get the U.S. economy closer to breakeven after the disastrous Q2 — any quarter in a “normal year” would be pleased as punch to see 4%+ growth. Keep in mind this growth in the final quarter of last year was without the benefit of an additional stimulus package we saw that brought much of Q3 back from Q2.

Durable Goods Orders for January stormed past expectations this morning: +3.4% more than tripled the 1.0% analysts were looking for. This manufacturing metric also saw a big upward revision for December, from 0.5% originally reported to +1.2% this morning. The core read doubled expectations to +1.4% and ex-Transportation was still +0.9%. Non-defense, ex-Aircraft durables — ac proxy for general business spending — came in at +0.5%, the only lower figure in this set of numbers.

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