Jobless Claims Remain Same WoW
Pre-market futures are lower this morning, on what is likely a combination of effects: Weekly Jobless Claims numbers that are pushing up through previous ranges, wholesale economic reads that were better than expected but still elevated, and a dearth of news on the pending trade agreement between the U.S. and China that President Trump announced Wednesday morning.
In fairness, these futures were down ahead of these reports hitting the tape. Partly, especially on the blue-chip Dow, due to a tragic plane crash in the city of Ahmedabad in the western region of Gujarat in India. The jet was a Dreamliner 787-8, and while details on why the crash happened — to say nothing of the 242 people aboard the plane, and those in the apartment buildings where the plane crashed — have yet to be determined, Boeing BA shares are down -7% on this news.
This all said, the Dow is -225 points at this moment in today's pre-market, the S&P 500 is -25 and the Nasdaq is -85 points. The small-cap Russell 2000 is down -15 points at this hour. We were at weekly and monthly highs just yesterday morning, but it looks as if we may need to earn that level again from here.
Weekly Jobless Claims Keep Warming Up
Thursday morning almost always brings Weekly Jobless Claims, and today is no exception. Initial Jobless Claims came in at +248K, equalling the previous week's upwardly revised tally and higher than expectations by about 2K or so. The trailing 4-week average in new claims is now +240K; the 4-week average directly prior was +231K.
Continuing Claims notched its third-straight week above the 1.9 million threshold: 1.956 million, to be exact — above the 1.902 million the prior week and the highest single week on longer-term claims since mid-November of 2021. Over the past couple months, 1.9 million reports would be revised downward by the next week, displaying an ebb-and-flow on longer-term jobless claims. Now we're inching closer to 2 million per week, which will change the narrative on the jobs market once it arrives.
PPI Wholesale Prices Cool Near-Term
The May Producer Price Index (PPI) is the wholesale side of prices, out a day following the Consumer Price Index (CPI), which represents the retail side. Headline PPI month over month came in at +0.1%, down from the +0.2% expected and swinging to a positive from the upwardly revised -0.2% for April. Stripping out food and energy prices, core PPI month over month also reached +0.1%, 20 basis points (bps) lower than expected and up from -0.2% the previous month.
Year over year, PPI headline reached +2.6% for May, 10 bps higher than the upwardly revised +2.5% for April. This is notching the wrong direction again, but still well off the 3%+ prints on headline PPI from late '24/early '25. Core PPI year over year reached +3.0%, down 20 bps month over month and off the 12-month high in March of +3.9%.
Much as the CPI data showed us yesterday, inflation — while range-bound somewhere north of optimum rates from the Fed's perspective — is no longer out of control. The tariff issue is still unresolved, ultimately — the expiration of reciprocals is now T-27 days (barring a future change in tariff policy from the White House) — but kept at current levels, we can see the economy grinding along.
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