Market Moving Jobless Claims Number on Deck

Economic Report Monitor #1
March 25th, 2020

Economic reporting took a backseat to policymaking as the Senate announced the completed stimulus deal being completed late Tuesday night, early Wednesday morning. The package worth about $2 trillion will provide liquidity for companies as they see gaps in revenue and economic relief payments for most Americans below a certain economic threshold. This should ease the pain of economic indicators soon to be released.

Mortgage applications saw a large double-digit drawdown last week. The composite index was down -29.4% weighed down by another double-digit drop from refinancing. Mortgage rates are off the near-term lows (52-week lows for 30-year at 3.52%, 15-year at 2.95%) but look to remain near there for the time being. That being said, there shouldn't be another rush to refinance as consumers are going to be more conservative during the current turbulence. They also have some time to move. Interesting to note, new 48-month new car loans reached new lows today around 4.38%.

The surprise of the morning was a 1.2% jump in durable goods new orders in February when analysts expected significant decline. Shipments also posted a gain of 0.8%, another sign the economy hasn't show the COVID-19 effects yet. March numbers are surely going to be worse. It is worth pointing out that transportation equipment carried the gains with new orders up 4.6% and shipments up 2.9%. Inventories remain healthy for now as no change was reported in February. The largest draw on inventories was in computer and electronics products, down -0.7%. The segment does rely on China as a supplier for intermediate and raw materials.


Investors are now looking forward to jobless claims which are set to come out Thursday morning. Data for the week of March 14th showed an initial rise in claims from COVID-19 to 281,000 which is 70,000 above the previous 211,000 level. Local governments are looking to unemployment benefits to provide some relief to workers who were laid off or put out of work by the pandemic, so this indicator will be an initial look into what an unemployment number might look like in the aftermath of the crisis. Median estimates have the number around 3 million, a huge increase in a matter of a week. However, late Wednesday California revealed a jobless claims rate of about 1 million suggesting analysts may be surprised in the morning.

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