Initial Claims Grew Less Than Expected

Lots of data out today beginning with the early morning announcement from the Mortgage Bankers Association that Mortgage Applications grew 0.8% last week on the heels of the prior week’s rise of 1.1%. Just out from the Bureau of Labor Statistics, Initial Jobless Claims for the week ending December 19th came in at 803k and that was less than the prior week’s 885k and also less than the 880k that analysts were expecting. Continuing Claims for the week ending December 12th fell to 5.33M from 5.51M versus an expectation of 5.56M.

The Census Bureau’s preliminary report for November Durable Goods Orders was also released today and showed that those orders grew by a greater-than-expected 0.9%. October’s rise of 1.3% was revised to 1.8%. Also in the report, core Capital Goods Orders rose by 0.4% against an expected 0.5% boost. October’s previously reported growth of 0.8% was revised to a 1.6% gain.

The Bureau of Economic Analysis also reported that Personal Income in November fell by a disconcerting 1.1% against an expected drop of just 0.3%. This comes on the heels of October’s fall of 0.6%. We also learned that Personal Spending fell by 0.4% versus a forecast of minus 0.2% while October’s rise of 0.5% was reduced to 0.3%. Inflation-adjusted Real Personal Spending fell by 0.4%; slightly greater than the 0.3% slide that was expected.

The BEA also reported that its Personal Consumption Expenditures Index was unchanged last month as the year-over-year inflation rate fell one-tenth to 1.1%. Without food and energy, core PCE was also flat in November with the year-over-year pace remaining unchanged at 1.4%. A little later, the FHFA will report its October House Price Index and the University of Michigan will release its finalized December report on Consumer Sentiment.

The Treasury market has had little reaction to the news as all eyes are focused on the latest turmoil surrounding the previously thought-to-be-done covid relief package. The President wants greater stimulus checks added in and some of the pork taken out. Treasury prices are little changed with the Ten-Year hovering around 92 basis points with the Long Bond at 1.65%. Crude oil has slipped slightly to $47.01 with gold up about $5 to $1,866. Equity indices are slightly higher in pre-market trading.