Jobless Claims Stay Out Of Range; Also Philly Fed, Deficit

Thursday, December 19, 2019

We see new jobs data this Thursday morning — Initial Jobless Claims came down by 18K from the previous week, from an unrevised 252K to 234K. This was just about right in-line with analysts’ expectations. However, it’s also still a ways out beyond the long-term range we’ve seen (in the “historic lows” category) of between 200K and 225K new claims.

Much of this two-week bump outside the top-end of the range can be chalked up to seasonality, and especially ahead of 2020, a census year: post-Thanksgiving, plenty of temporarily retail jobs go away; as the census process continues, the U.S. government also tends to shed jobs. That said, the past couple holiday seasons haven’t pushed new claims as high as we’ve seen over the past two weeks,

Continuing Claims, while also demonstrating strength when one checks weekly results historically, have also ticked up back over the 1.7 million mark. Keep in mind, prior to 2018, we never saw long-term jobless claims fall below 1.8 million, let alone 1.7 million. On the other hand, we will continue to monitor whether long-term lows down near 1.64 million represent the depth of the valley.

Philly Fed numbers for December also came out, with results more disappointing than expected. Coming off the previous month’s 10.4 print, this month’s productivity projections for the 6th largest municipality in the U.S. came in at only +0.3. Analysts were expecting something closer to 8.0. These monthly figures are routinely volatile, however — though the December number matches the 0.3 from June of this year, Philly Fed posted +21.8 in July, but only -4.1 back in February of this year.

The current U.S. account balance (deficit) for Q3 has also been reported ahead of today’s opening bell, with results better than expected: -$124.1 billion was an improvement on the downwardly revised prior read of -$125.2 billion. This represents a gradual improvement from what we’ve seen since Q4 2018, which hit 10-year lows south of $140 billion.

The all-time record low came in Q3 2006, when the U.S. account deficit plummeted to -$215.7 billion. Historically, the U.S. account balance stayed at zero until the mid-1970s, but really fell off the table around the start of the 21st century.

Mark Vickery
Senior Editor

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