Mixed data and confused traders!
Today we were waiting for four critical data from the United States. Durable goods orders, GDP, Jobless Claims, and Pending Home Sales.
On the employment front, new applications for registered unemployment benefits for the fourth week decreased. Initial Jobless Claims by 38K reducing fell to 406K, comparing with 425K estimates, and this is the lowest number in the past 15 months since the economy got hit by the Crono virus.
Employment rise as more Americans get back to their jobs since more than half of the population already got their vaccines. According to the US Department of Labor, while a 4-week average of initial claims fell to 458.75 K from the prevouse 535.25 K, continuing claims decreased to 3.642 M less than 3.68 M estimates and the previous 3.738 M number. Before the Cronoa Virus crises, the number of new applications had been running as low as 200K.
The inconsistency of jobs data in the US, seen in the Job openings and more than 10 million unemployed numbers, is the biggest question for many economists. Since the Job openings are much more than highering, why do Americans not get the jobs? While the recent Job openings surged to new record highs, many believe huge unemployment benefits, holding back the Americans from taking employment. This likely factor persuaded almost half of the States to stop the benefits from late June. Many others also support the services, and they justify that many people, especially women, have to take care of children or elderly parents because of the pandemic.
GDP: Today, the Commerce Department also published the gross domestic products for the first quarter of 2021. Based on the published numbers, the US economy increased by 6.4% in the first quarter, the same as initial numbers, but 0.1% less than the 6.5% expected number. This is the second-fastest GDP growth since the third quarter of 2003. However, this sharp increase in production directly depends on massive fiscal stimulus.
Durable Goods Orders: Core Durable Goods Orders raised 1% in April, which is more than 0.8% expected and less than 3.2% in March. Also, Durable Goods Orders decreased -1.3%, much less than 0.7% and 1.3% in March. This is a bit confusing since last week, Manufacturing PMI for April showed a significant increase, and now Durable Goods Orders show a different picture. It should not be a positive for economic recovery, however, not that harmful as well, as Core Durable Goods Orders inched higher.
Pending Home sales: And the latest published data was for pending home sales. Pending Home Sales in April decreased -4.4%, comparing with 1.7% in March, disappointing markets.
Market reaction: As data are very mixed and conflicting, the market now can pricing more on FED to hold the current ultra-dovish policies, at least for the rest of 2021, and even if it is going to be some talks about restricted plans, it must be in 2021, however for better understanding have to wait for tomorrow's PCE numbers.
