Jobless Claims and More Deflation News

Just out this morning, Initial Jobless Claims for the week ending June 6th were reported by the Bureau of Labor Statistics to have been 1.54M. This is pretty close to the expectation of 1.55M and less than the prior week’s upwardly revised 1.9M. For the week ending May 30th, Continuing Claims came in at 20.93M, less than the prior week’s downwardly revised 21.3M but more than the 20M that was forecast.

In a follow-up to yesterday’s CPI report, the BLS today reported that its Producer Price Index rose unexpectedly in May by 0.4% against an expected rise of just 0.1%. The new year-over-year rate now stands at a minus 0. 8% and that’s up from April’s minus 1.2%. Analysts were expecting the twelve-month rate to remain unchanged. At the core level, without pricey food and less pricey energy, that measure fell as expected by 0.1% after April’s dip of 0.3%. Year-over-year, that core rate fell to 0.3% from April’s 0.6%. Analysts were only expecting a slide to 0.4%. Aggregate supply and aggregate demand are recalibrating themselves and changing price levels show it.

In early trading, the continuation of the rally in the Treasury market has pushed the Ten-Year’s yield below 70 basis points as equity markets are poised to open significantly in the red. This seems to be less about today’s data than yesterday’s Press Conference from Chairman Powell. Surprisingly, his cautious remarks about the deep economic hole we’re in seems to have come as a surprise to equity investors and it’s looking like a risk-off day. This comes despite Mr. Powell’s pledge to keep rates low and asset purchases high. What do they want?

At the moment, crude oil is off about $2.50 to just over $37 while gold is off around $7 to $1,731.