1)Initial jobless claims fell to 473k from a revised 507k last week. The estimate was 490k while last week was revised from 498k. The 4 week average fell to 534k from 562k. PUA was little changed at 104k from 102k. Delayed by a week, continuing claims fell by 45k w/o/w but has essentially flat lined over the past 4 weeks.
2)The number of job openings in March exceeded 8mm for the very first time at 8.12mm. That is up from 7.53mm in February and vs the estimate of little change. Hiring’s were modest in the context of the amount of openings as they rose by 215k. I can’t figure out why layoffs increased too, by 243k. The number of quitters increased by 125k.
3)The April NFIB small business optimism index rose 1.6 pts m/o/m to 99.8 and that is the best since a print of 101.4 in November. Positions not able to fill rise to a record high. The NFIB said “Small business owners are seeing a growth in sales but are stunted by not having enough workers. Finding qualified employees remains the biggest challenge for small businesses and is slowing economic growth. Owners are raising compensation, offering bonuses and benefits to attract the right employees.” On broad inflation, the NFIB said “We don’t have inflation until it shows up on Main Street, but it is beginning to do so.”
4)With a 7 bp decline in the average 30 yr mortgage rate, the MBA said purchase applications rose .8% w/o/w and 13.4% y/o/y while refi’s were up by 2.9% w/o/w but still down 11.5% y/o/y.
5)When including the March upward revision, industrial production in the US in April exceeded expectations with manufacturing in particular up .4% m/o/m after a 3.1% increase in March. The semi shortage though was evident in auto production as it fell by 4.3% m/o/m and computer/electronics production was up just .3% m/o/m. Capacity utilization rose .5% m/o/m to 74.9% but remains well below the long term average of around 80%.
6)Credit growth slowed in April in China relative to March and from the expectations. Aggregate financing totaled 1.85T yuan, almost 450b yuan less than forecasted and down from 3.34T in March. Of this, bank loans were 1.47T of the total, 130b yuan below the estimate. Money supply growth slowed dramatically, as measured by M2, to an 8.1% y/o/y growth rate from 9.4% in March and vs the estimate of up 9.2%. That’s the lowest since July 2019.
7)China CPI in April rose by a modest .9% y/o/y, about as expected. The core rate was up by .7% y/o/y.
8)Thanks to a successful vaccine rollout and further reopenings, the UK economy grew by 2.1% m/o/m in March, more than the estimate of up 1.5% and February was revised up to an increase of .7% from .4% initially. Construction strength along with a bounce in retail sales led the way.
9)The ZEW German economic expectations index for May rose to 84.4 from 70.7 and that was 12.4 pts better than expected and a 21 year high. The current conditions component was up by 8.7 pts m/o/m. ZEW said “The slowing down of the 3rd covid wave has made financial market experts even more optimistic.”
10)Summer concert tour announcements pick up steam. What a long strange trip it’s been. //twitter.com/deadandcompany/status/1392920217693556738
1)Higher inflation expectations is cited as the main reason for the drop in May consumer confidence to 82.8 from 88.3 according to the UoM and below the estimate of 90. Last February the index stood at 100 right before everything hit. Both Current Conditions and Expectation components were lower. One year inflation expectations jumped to 4.6% from 3.4% in April, matching the highest since 2008 and the 5-10 yr prediction rose 4 tenths m/o/m to 3.1%, a 10 yr high. The UoM specifically said “Consumer confidence in early May tumbled due to higher inflation…Rising inflation also meant that real income expectations were the weakest in five years. The average of net price mentions for buying conditions for homes, vehicles, and household durables were more negative than any time since the end of the last inflationary era in 1980.”
2)Headline CPI jumped .8% m/o/m and the core rate by .9% in April, blowing past expectations of up .2% and .3% respectively. That core rate gain is the most since 1982. Goods inflation, the focus of all the supply challenges, spiking transportation costs and rising commodity prices was reflected in the 2% m/o/m increase in core goods prices vs .1% in March and -.2% in February. On the services side, prices rose .5% m/o/m after a .4% increase in March.
3)The Cleveland Fed’s trimmed CPI for April rises by .4% m/o/m, the quickest pace since 2008.
4)The NY Fed’s April ‘Survey of Consumer Expectations’ shows the “median yr ahead inflation expectations increased to 3.4% in April from 3.2% in March. This marks the measure’s highest level since September 2013. The three yr outlook remained unchanged at 3.1%. Home price change expectations rose sharply to a new series high of 5.5% in April from 4.8% in March. Rent growth expectations posted a 5th consecutive increase, rising to a new series high of 9.5%. The median one year outlook for gas prices and medical care decreased.”
5)The April PPI jumped .6% m/o/m, double the estimate and comes after a 1% rise in March. The core rate was higher by .7% vs the estimate of a .4% increase and matches the rise seen in March. For those that want to see the easy comp y/o/y increase, it was up 6.2% headline and 4.1% core.
6)Import prices for April rose .7% m/o/m headline and by the same amount ex petro. That is both above expectations by one tenth and two tenths respectively and come after increases of 1.4% and .8% in March.
7)After a strong March, core retail sales in April (taking out auto’s, gasoline stations and building materials) fell 1.5% m/o/m, worse than the estimate of down .2% but partially offset by a 7 tenths upward revision to March which saw a 7.6% m/o/m gain.
8)Delayed by two weeks, those continuing to received PUA benefits rose by 420k w/o/w and those getting the emergency kind was up by 291k w/o/w.
9)China said its producer price index for April jumped by 6.8% y/o/y. Yes, easy comps but it was 3 tenths higher than expected and still reflecting the sharp rise in commodity and transportation costs. We will now be importing this inflation.
10)In Europe, the March Eurozone industrial production figure saw just a .1% m/o/m gain, well less than the estimate of up .8% and February was revised down by 2 tenths.