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Consistent with the trend year to date, claims remain in their ~450k range, too high for unemployment to improve meaningfully. This morning the reported number fell 14k to 460k, down from last week's revised print of 474k, and higher than consensus of 458k.  Rolling claims climbed 2k to 457k week over week.  Remember, we need to see initial claims fall to a sustained level of 375-400k in order for unemployment to fall meaningfully and, by extension, lenders' net charge-offs to return to normalized levels.  We remain well above that level.  

As a reminder around the census, May is the expected peak employment month. Starting next week the census will become a headwind for job creation.  

CLAIMS IMPROVE BUT REMAIN IN SAME RANGE THEY'VE BEEN IN YTD - raw

CLAIMS IMPROVE BUT REMAIN IN SAME RANGE THEY'VE BEEN IN YTD - rolling

The following chart shows the census hiring timeline.  If the past two cycles are an appropriate model for this year's census, we should start to see Census employment draw down as we move into June, creating a headwind for employment. 

CLAIMS IMPROVE BUT REMAIN IN SAME RANGE THEY'VE BEEN IN YTD - census chart

Joshua Steiner, CFA

Allison Kaptur