- The Labor Department reported that initial jobless claims edged higher last week and seem set to fluctuate around current low levels. Demand for labor remains strong with job openings at record highs. Claims in regular state programs increased 11,000 to 227,000 for the week ending March 5th, after reporting 216,000 initial claims the prior week. The four-week moving average climbed to 231,250 from 230,750 the prior week. The total number of people continuing to receive regular ongoing state benefits, a report which is lagged one week, climbed 25,000 to 1.494 million for the week ending February 26th.
- The Federal Reserve reported consumer credit rose at its slowest pace in a year as consumers paid down credit card balances that jumped during the holiday buying season. Consumer credit increased $6.8 billion after gaining an upwardly revised $22.4 billion in December. Credit card debt declined $0.2 billion to $1.043 trillion with auto and student loan debt increasing by $7.1 billion to $3.399 trillion.
- The National Federation of Independent Business reported sentiment among small businesses dropped to its lowest level since January of 2021. Inflation and labor are the most important problems plaguing small businesses as concerns about the pandemic subside. The index declined 1.4% to a 95.7 reading in February from 97.1 the prior month.
- The Commerce Department reported the trade deficit widened in January to a new record. The value of imports, especially capital equipment, consumer goods and oil pushed imports to a record while exports declined. The deficit increased 9.4% to $89.7 billion in January. Imports rose 1.2% to $314.1 billion and exports fell 1.7% to $224.4 billion.
- The Commerce Department reported wholesale inventories rose 0.8% in January after gaining 2.6% in December. Year-on-year wholesale inventories have gained 18.1%. Wholesale sales increased 4.0% in January after gaining 0.8% in December, with year-on-year sales up 22.4%.
- The Labor Department reported that job openings edged lower in January but remained at a very elevated level. Job openings decreased by 185,000 in January to 11.263 million, from an upwardly revised 11.448 million in December. There are 0.58 unemployed job seekers for each available job. The quits rate declined to 2.8% from a record 3.0% in the prior month, pointing to a high degree of churn in the labor market.
- The Labor Department reported the consumer price index increased in February at the fastest annual pace in four decades, with costs surging for gasoline, food and housing. Costs are expected to continue to climb following Russia’s invasion of Ukraine. The data shows goods inflation is spilling over to core services inflation and energy costs passing through to core inflation. That adds to the growing momentum for stickier price pressures. The index gained 0.8% in February after gaining 0.6% the prior month. The year-on-year change in consumer prices is 7.9% in February. Service prices gained 0.5% in February after climbing 0.6% in January. Prices of commodity based manufactured goods gained 1.3% in February after gaining 0.8% the prior month. The core CPI,
which excludes volatile food and energy prices, gained 0.5% in February after climbing 0.6% the prior month. The year-on-year change in core CPI is 6.4%. - The Treasury Department reported a budget deficit of $216.6 billion for the month of February with the government collecting $289.9 billion and spending $506.5 billion. This compares to a deficit of $310.9 billion a year earlier. The current year-to-date deficit as of February is $475.6 billion.
- The University of Michigan’s preliminary index of consumer sentiment continued to deteriorate as surging inflation weakens personal financial prospects. Consumers held a very negative prospect for the economy with the sole exception of the job market. The index decreased to 59.7 in March from a 62.8 reading in February. The index of current conditions decreased to 67.8 from 68.2 the prior month while the index of expectations dropped to 54.4 from 59.4, its lowest reading in more than a decade.
- The Mortgage Bankers Association reported the MBA index of mortgage applications rose 8.5% for the week ending March 4th after falling the previous four weeks. Refinancing applications increased 8.5% to 1,830 from 1,686 the prior week. Home purchase mortgage applications increased 8.6% to 267.6. The average contract rate on a 30-year fixed-rate mortgage declined to 4.09% from 4.15% the prior week for a 30-year fixed rate loan.
About the Expert
Troy Clark
Senior Vice President, Fixed Income Strategist, Fixed Income Sales & TradingMr. Clark has been in investment banking since 1983. He is a Chartered Financial Analyst. He has been a fixed income strategist at Stephens Inc. since 1996, developing investment strategies, policies and procedures for institutions consistent with overall asset/liability management.
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