Initial Jobless Claims is a weekly report that tracks how many people have filed for unemployment benefits. It is both a solid gauge on the state of the labor market and economy, and a leading indicator on what to expect in the months ahead. So, what are Initial Jobless Claims telling us today? Last week’s 196,000 recorded was the lowest in over 50 years! This is what it’s telling us:

  1. The labor market continues to strengthen.
  2. The chance of a recession in 2019 is near zero.

Low Initial Jobless Claims also leads to continued higher wage gains, which is wonderful for consumer spending and housing.

Another great data point this past week was the JOLTS (Job Openings and Labor Turnover Survey) which showed the US economy still has a 1,000,000-person shortfall against the current 7,000,000 job openings. This is just another example of how tight the labor market remains.

Bottom line – the great story remains low rates, plus a great job market, equal an attractive housing market.

Looking forward: With just some mid-tier economic data this week, the US markets will look to the canary in the coal mine for direction — corporate earnings season. Will corporate earnings confirm that a slight economic slowdown has taken place here in the US? The numbers will give an indication, as will their guidance or forecast for the future.

Housing data for March will also be closely watched with the kickoff of the spring homebuying season. In addition, consumer spending will be released in the form of Retail Sales. Consumer spending makes up about 68% of the US economy and is a main driver of economic growth.

This week is shortened by the upcoming holiday. The bond markets will close early on Thursday at 2:00 p.m. ET, and are closed on Good Friday. US stock markets are also closed on Good Friday.

Reports to watch:

  • Manufacturing data will come from Monday’s release of the Empire State Index followed by Thursday’s Philadelphia Fed Index.
  • Housing Starts and Building Permits will be delivered on Wednesday.
  • Retail Sales and Weekly Initial Jobless Claims will be released on Thursday.

Source: Vantage

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