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Takeaway: Initial Claims came in at 498K, falling -16% w/w and marking a new pandemic period low.

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Downtrend Growing More Steady For Weekly U.I. Claims - 05.08.2020 jobs tree stump cartoon  1

Hedgeye Macro virtuoso Christian Drake offers up his summary of  this week's claims data:

As we’ve indulged in highlighting over the past month+ …. the long, cathartic Jobless Claims exhale continues as the labor exodus moderates further and the psychological toll associated with acute income and housing insecurity ebbs as net employment accelerates.

Initial Claims went for a 4-handle in the latest week, dropping -92k sequentially to 498K while marking a new pandemic period low.

Remember, simply, how this is going to play out: The trajectory of the data is set to maintain a consistent down Trend with lower amplitude oscillations around that Trend in any given week.

It’s not about the separation side of net payroll equation anymore. Frankly, with actual and planned Hiring (NFIB Survey, Fed Regional Surveys, ISM, etc) accelerating while Job Postings sit well above pre-pandemic levels, supply and production constraints remain acute and “Jobs Hard to Fill” remains perched at an ATH, it’s more about whether businesses can hire fast enough to keep pace or get ahead of domestic Service sector renormalization.

Consensus seems to have internalized that reality ahead of tomorrow’s NFP data for April where estimates are looking for 1.0M adds on the nose with some notable right tail skew (low estimate = 700K, high estimate = 2100).

Again, the pace of labor market improvement is likely to determine the extent to which the (still) burgeoning domestic demand-supply imbalances flow through growth in prices or growth in real output.

HEDGEYE FINANCIALS WEEKLY LABOR MARKET READING

Downtrend Growing More Steady For Weekly U.I. Claims - Summary 

Downtrend Growing More Steady For Weekly U.I. Claims - Initial 

Downtrend Growing More Steady For Weekly U.I. Claims - PUA

Downtrend Growing More Steady For Weekly U.I. Claims - Continuing

Downtrend Growing More Steady For Weekly U.I. Claims - Total

Downtrend Growing More Steady For Weekly U.I. Claims - PEUC