Data Dump – More Weak Economic Data

Just a quick rundown of today’s economic data:

• CPI came in at 1.1% year over year.  The government’s headline data has trended lower than I would have expected mainly due to the extremely weak energy data.  The core (ex-energy and food) remains just below the Fed’s comfort zone at 1.7%.  In general, this data is consistent with an accommodative Fed who sees a very weak underlying economy.  No big changes in outlook based on this data.  It’s all consistent with the muddle through story. I’ll have more details on this later in the day when I have some time to crunch the numbers on the Orcam Housing Adjusted Price Index.

• Housing starts were a bit more mixed with starts missing expectations and permits beating expectations.  The housing market has been fairly strong this year and I don’t think that we’re seeing a major change in trend there.  This data is mixed at best and doesn’t change the bigger picture in real estate at this point.  

• Jobless claims spiked to 360K following last week’s reading of 330K.  This was the highest reading since March.  The 4 week moving average is still on the way down despite this week’s jump in claims.  This is definitely not a good data point, but given the weekly volatility in the claims data it’s best to focus on the 4 week trend and not the weekly reports.  If this becomes a persistent trend then it’s worth starting to get concerned over.

• The Philly fed survey was very weak coming in at -5.2.  That was well below consensus of 2.2 and down from last month’s reading of 1.3.  New orders were down -7.9 in a clear sign that manufacturing is softening.  This comes on the back of yesterday’s weak NY Fed survey.   Overall, this brings the composite real-time index to a slightly negative reading.  That means the ISM Manufacturing data is likely to remain very soft for the month of May when we get the next reading.