Your Thursday ¯\_(ツ)_/¯

Not so bad


This, on the other hand………So we got the unemployment numbers and the home sales numbers, and the latter are a little bit alarming.

Unemployment claims, both initial and continuing, were basically flat and relatively low, while home sales are about 50% off peak as a result of the Fed's rate increases:

The number of Americans filing new claims for unemployment benefits was unchanged at a low level last week, pointing to continued labor market strength that is driving the economy.
Labor market resilience, together with elevated inflation have led financial markets and some economists to expect that the Federal Reserve could delay cutting interest rates until September. A few economists doubt that the U.S. central bank will lower borrowing costs this year.

"Overall, layoffs remain low," said Rubeela Farooqi, chief U.S. economist at High Frequency Economics. "We expect a continuation of the current trend, with a further adjustment in the labor market coming from a moderation in hiring rather than a surge in firings."

Initial claims for state unemployment benefits were unchanged at a seasonally adjusted 212,000 for the week ended April 13, the Labor Department said on Thursday.

………

Fed Chair Jerome Powell backed away on Tuesday from providing any guidance on when rates might be cut, saying instead that monetary policy needed to be restrictive for longer. Financial markets initially expected the first rate cut to come in March, but the timing got pushed back to June and now to September as data on the labor market and inflation continued to surprise on the upside in the first three months of the year.

The Fed has kept its policy rate in the 5.25%-5.50% range since July. It has raised the benchmark overnight interest rate by 525 basis points since March of 2022.

………

The Fed's latest "Beige Book" report on Wednesday described employment as rising at a "slight pace overall" since late February, adding that "several districts reported improved retention of employees, and others pointed to staff reductions at some firms."

It also noted that even as labor supply has improved, "many districts described persistent shortages of qualified applicants for certain positions, including machinists, trades workers and hospitality workers."
Data next week on the number of people receiving benefits after an initial week of aid, a proxy for hiring, will offer more clues on the state of the labor market in April. The so-called continuing claims edged up 2,000 to 1.812 million during the week ending April 6, the claims report showed.

Though still low by historical standards, the slightly elevated level of continuing claims suggests it could be taking longer for some unemployed workers to land new jobs.

With the outlook for rate cuts uncertain, the average rate on the popular 30-year fixed-rate mortgage has drifted above 7%, data from mortgage finance agency Freddie Mac showed, combining with higher house prices to depress home sales.

A separate report from the National Association of Realtors showed existing home sales fell 4.3% in March to a seasonally adjusted annual rate of 4.19 million units.

With commercial and residential real estate cratering, this seems awfully familiar to me.

2008 meltdown anyone?