Initial Claims Drop To 49-Year Low But Durable Goods Orders Disappoint

Another week, another near record low in US initial claims, which in the week ended April 21 dropped to just 209K from 233K last week, the lowest print since September 1969, and below consensus estimates of 230K. Continuing claims also fell, although less dramatically, by 29k to 1.837 million. That said, some of the data was questionable, with the Labor Department saying claims for Colorado and Maine were estimated last week.

Meanwhile, while Durable Goods rose 2.6% in March, beating expectations of 1.6% if lower from last month’s 3.5% increase, much of this was thanks to transports, which rose 7.6% as well as nondefense aircraft, which soared 44.5%. Excluding transports, durables missed, and were unchanged on the month, down from 0.9% last month, and below the 0.5% expected increase.

Core Capex in the form of capital goods orders nondefense ex air also missed, declining -0.1% in March, far below the 0.5% expected increase, and confirming once again that instead of investing the Trump tax reform proceeds in their businesses, companies are largely allocating capital to dividends and buybacks.

However, perhaps the most important print came in the form of the far less closely followed Advance Goods Trade Deficit, which unexpectedly narrowed substantially, from 75.9BN to just $68.0BN, and far better than the $75BN expected. This suggests that tomorrow’s Q1 GDP print could be a material upside surprise.

via RSS Tyler Durden

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