Initial Jobless Claims Collapse To Lowest In 44 Years Initial jobless claims plunged 19k last week to 223k. This is now the lowest level of initial jobless claims since March 1973, and is very close to the lowest levels since 1969. This is now the longest period of declining initial jobless claims in US history (from March 2009 to March 2017) Last week's drop was a 4 standard deviation beat of expectations... The question is - is this as good as it gets?
Here are tomorrow's (Tuesday 3.7.17) economic events- Not much to see here, but it does start to pick up after Tuesday...
Trump Effect: ADP Employment Surges Near Most In 6 Years On Record Goods-Producing Job Gains Following January's surge in employment (biggest gain in 7 months), February's ADP print exploded higher to 298k (5 sigma above all expectations). This is the third biggest monthly employment gain of the expansion. It appears the 'Trump Effect' is the biggest driver as the ADP payroll surge was mostly due to a record surge in employment for goods-producing industries. Private sector employment surged by 298,000 for the month, with goods producers adding 106,000. Construction jobs swelled by 66,000 and manufacturing added 32,000. 3rd best month of the recovery: This is 5 standard deviations above the 187k expectation.... Led by a record surge in goods-producing jobs... The details: "Confidence is playing a large role," Mark Zandi, chief economist of Moody's Analytics, told CNBC. "Businesses are anticipating a lot of good stuff — tax cuts, less regulation. They are hiring more aggressively." March rate-hike odds were 98% going into ADP and we suspect it will uptick from here. “February proved to be an incredibly strong month for employment with increases we have not seen in years,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute. “Gains were driven by a surge in the goods sector, while we also saw the information industry experience a notable increase.” Mark Zandi, chief economist of Moody’s Analytics said, “February was a very good month for workers. Powering job growth were the construction, mining and manufacturing industries. Unseasonably mild winter weather undoubtedly played a role. But near record high job openings and record low layoffs underpin the entire job market.” Some more visual details: Change in Nonfarm Private Employment Change in Total Nonfarm Private Employment Change in Total Nonfarm Private Employment by Company Size
Here are tomorrow's (Friday 3.10.17) economic reports- Obviously all eyes on the NFP's for clues into what the Fed may or may not do next week.
Small Business Owners Still Optimistic Mar 14, 2017 Today’s release of the NFIB Small Business Optimism Report showed a slightly larger than expected downtick in overall optimism. With economists collectively expecting the overall index to decline from 105.8 down to 105.6, the actual reading came in at 105.3. Despite the larger than expected decline, overall optimism is much higher than where it was just a few months ago, well above its average level of 96.0 dating back to 2000, and also right near its cycle highs. So from an economic perspective, it’s hard to get too disappointed with this reading. That said, while optimism remains solid, as the NFIB stated in the report, “Optimism has not faded, but the enthusiasm has yet to be translated into an equally impressive increase in spending and hiring. This will require progress on the agenda that business owners voted for.” Within each month’s survey, the NFIB asks small business owners what the number one problem is that they face in running their businesses. In this month’s data, we saw a lot of sizable changes. For the first time in a long time, Taxes and Government Red Tape are not the two top problems cited. Taxes remain at the top with 22% of small businesses citing it as their number one problem, but Govt Red Tape saw a sharp drop in the percentage of businesses that cited it as their number one problem, falling from 19% down to 15%. At the same time, Labor Quality moved up two percentage points from 15% to 17%. In terms of Labor, the increase of businesses citing Labor Quality as their number one problem could ultimately lead to increased labor costs down the road as business owners are forced to pay up for better workers. That didn’t show up in this month’s report, though, as Cost of Labor was actually only cited by 5% of small business owners as their number one problem, which was down from 7% in January. The charts below show the change over time in the percentage of small businesses that cited Quality of Labor and Government Red Tape as their number one problems. In the case of Quality of Labor, this month’s reading of 17% is tied for the highest reading in the history of the survey going back to 2008. Meanwhile, the 15% of small business owners that cited Government Red Tape as their number one problem dropped down to its lowest level since June 2011. It’s amazing what a changed tone out of Washington can do for sentiment.
Here's a look at tomorrow's (Tuesday 3.14.17) economic calendar- FOMC decision due out at 2pm eastern time.
