It was a slow week for economic data with markets being closed for the Christmas Holiday, and with little data being reported, volatility was muted as well. The 10yr Treasury started the week at 4.58 and was trading around 4.61 as of the time of this writing. On Monday, the US Census Bureau released its Durable Goods Orders survey. Headline Durable Goods Orders declined -1.1% (est -0.3%) with much of the decline being driven by the volatile transportation sector. At the same time, New Orders for non-defense capital goods excluding aircraft, which is a proxy for future business investment rose 0.7% (est 0.1%). On a year-over-year basis, business investment has been trending lower, but this recent report may suggest improving business sentiment with more certainty following recent elections and pro-business policies such as deregulation and tax cuts.
US Consumer Confidence also came out on Monday and was at a 5-month low, below analysts’ expectations. Ironically, consumers cited politics as a reason for the decline in confidence as uncertainty around tariffs and the potential impact on inflation weighed on consumers.
Initial Jobless claims remain relatively low coming in at 219k (est. 223k) suggesting that layoffs remain subdued against a cooler labor market. Continuing Claims spiked to the highest level in 3 years as unemployed workers are having more difficulty finding work. Furthermore, the duration of unemployment has increased to 10.5 weeks in November from 9 weeks a year prior. All-in-all the report tells us that layoffs remain low but once employees have been laid off, it appears that they’re having a harder time finding new work.
Next week is going to be light on data as well, but we’ll get a look at Pending Home Sales, the Dallas Fed’s Regional Manufacturing Survey, and the ISM Manufacturing Index. Have a great weekend!
Source: Bloomberg, L.P.
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Author
Dillon Wiedemann
Financial Analyst
The Baker Group LP
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