The Boock Report

Initial claims fell back below 200k to 192k, 13k below expectations and vs 212k last week. The 4 week average was little changed at 197k. After rising by 64k last week to near the highest since last February, continuing claims fell by 29k.

The bottom line again is companies are holding on to employees after a few years of difficulty in finding many of them. In terms of hiring, the pace has certainly slowed (if you look at stats other than the BLS) as more are collecting continuing claims.

Initial Claims

Continuing Claims

Following the weak NY manufacturing index, the March Philly index was as well coming in at -23.2, almost as weak as the -24.3 seen in February. The estimate was for modest improvement to -15. These are levels last seen in 2009. New orders, backlogs, inventories, delivery times, employment and the workweek were all deeply negative. Prices paid fell 3 pts while those received fell to the least since June 2020.

Negatively too, the 6 month outlook fell to -8 from +1.7 in February and capital spending plans fell below zero too at -3.8 from +7.5. If business slows, if cash flows are crimped, if margins are squeezed, capital spending inevitably slows.

Bottom line, we now have 2 regional manufacturing survey’s that tell us that the manufacturing recession has continued on into March.

Philly Mfr’g

Housing starts in February totaled 1.45mm, a large 140k above expectations and up from 1.32mm in January. It was almost all multi family as those starts jumped 120k m/o/m while single family was up just 9k to 830k after dropping by 60k in the month before.

Permits also jumped but again mostly due to multi family. Multi family permits were up by 130k m/o/m to 747k, the most since last July. Permits for single family rose by 55k to 777k, which is a 3 month high, and helped by the January drop in mortgage rates but was over 800k last October.

Bottom line, the coming multi family rental supply should continue to moderate rental price gains but at the same time, demand for rentals is still very strong. As for single family builds, we know what’s going on and just read again what Lennar said yesterday.

Multi Family Permits

Single Family Permits

Lastly today, February import prices were down one tenth m/o/m vs the estimate of down 2 tenths while January was revised lower to -.4%. Ex petro import prices were down by 4 tenths vs the forecast of up one tenth. A continued drop in the prices of industrial supplies is offsetting continued increases in the import prices of food/beverages, capital goods, autos and consumer goods. Nothing market moving here but reflects the moderation we’ve seen in goods prices.