LIVE MARKETS-Prelude to PCE: GDP, jobless claims, pending home sales, et al

Welcome to the home for real-time coverage of markets brought to you by Reuters reporters. You can share your thoughts with us at markets.research@thomsonreuters.com

PRELUDE TO PCE: GDP, JOBLESS CLAIMS, PENDING HOME SALES, ET AL

A swarm of data on Thursday gave investors plenty of things to consider.

The Commerce Department took its third and final stab at fourth quarter GDP USGDPF=ECI, bumping it up to a 2.4% quarterly annual rate from its previously stated 2.3%.

Digging into the data, the decrease in imports steepened, business investment in structures was revised sharply higher and the decrease in spending on equipment was a bit shallower than originally reported.

Private inventories and fixed business investments were detractors, together subtracting a full percentage point from the headline.

"The new data is backward-looking as this was a look at how the economy faired before the enormous surge in policy uncertainty, particularly trade, took hold and the Trump administration imposed additional tariffs," writes Ryan Sweet, chief U.S. economist at Oxford Economics (OE).

Consumer spending, responsible for about 70% of the U.S. economy, grew at a slightly slower pace, demoted to 4.0% from 4.2%. This is largely due to services expenditures, restated at 3.0% down from 3.3%.

Still, the American consumer contributed 2.7 percentage points to the topline.

Separately, 224,000 U.S. workers joined the queue USJOB=ECI outside the unemployment office last week, according to the Labor Department.

That's 1,000 more than last week but 1,000 shy of consensus.

The metric has been range-bound, bouncing around the 200,000 to 250,000 range for well over a year, and the 4-week moving average shows initial claims moving sideways with a slight downward bias.

The mass firings of federal workers by billionaire Elon Musk's DOGE campaign do not show up in initial jobless claims, which are reported by the states.

Those are reported under a separate program for unemployment compensation for federal employees (UCFE), which is reported on a one-week delay.

Ongoing claims USJOBN=ECI, also reported on a one-week lag, dropped by 1.3% to 1.856 million, likely at least partially attributable to benefits expiry.

"Initial claims for regular state benefits have stabilized at a level consistent with limited private sector layoffs," says Nancy Vanden Houten, lead U.S. economist at OE.

But "continued claims remain elevated as unemployed workers are finding it tougher to find new jobs in a slow hiring environment," Houten adds.

Turning to the housing market, signed contracts for the sales of pre-owned homes USNAR=ECI grew by 2.0% last month, double the 1.0% increase analysts expected and marking a partial recovery from January's 4.6% drop.

The National Association of Realtors' (NAR) Pending Home Sales report is considered among the housing market's most forward-looking indicators, as signed contracts typically turn into actual sales a month or two down the road.

"Despite the modest monthly increase, contract signings remain well below normal historical levels," says Lawrence Yun, NAR's chief economist. "A meaningful decline in mortgage rates would help both demand and supply."

Here's a chart pitting pending home sales against the MBA's average 30-year fixed contract rate. Since mortgage rates shot above the 6% level in the fall of 2022, pending home sales retreated to the lows seen on April 2020, the nadir of the pandemic shutdown crash.

And finally, back to the indefatigable Commerce Department, which released its advance take on goods trade balance USGBAL=ECI and wholesale inventories USAWIN=ECI for February.

The gap between the value of goods imported to the United States and those exported abroad narrowed by 4.9% to $147.91 billion last month.

But the trade deficit, as we've seen lately, remains at a record high, partly the effect of monetary gold imports streaming into the U.S. ahead of potential tariffs.

"Stockpiling of imported goods driven by the ongoing threats to apply new tariffs explains much of the recent blowout in the goods deficit and clearly has scope to continue in March," says Oliver Allen, senior U.S. economist at Pantheon Macroeconomics. "However, a big share of the overall deterioration in recent months reflects a boom in imports of gold in particular."

The value of goods stacked in the warehouses of U.S. wholesalers grew by 0.3%, marking a sharp deceleration from January's 0.8% increase.

All of this, of course, is the warm-up act to tomorrow's crucial Personal Consumption Expenditures (PCE) report due tomorrow, which is expected to show a rebound in consumer outlays and annual core PCE prices heating up to 2.7%.

(Stephen Culp)

FOR THURSDAY'S EARLIER LIVE MARKETS POSTS:

U.S. STOCKS DIP WITH CARMAKERS AFTER TRUMP TARIFF PLAN - CLICK HERE

JEFFERIES' WEAK Q1 RESULTS STOKE FEARS FOR WALL STREET'S INVESTMENT BANKS - CLICK HERE

GROWTH OFF TO A ROUGH START VS VALUE - CLICK HERE

CHINESE ANIMATED FILM NE ZHA PARTLY BEHIND SENTIMENT BOOST - BOFA - CLICK HERE

UBS REFRESHES TOP PICKS IN "DEEPLY UNDERVALUED" UK SMALL AND MID CAP SPACE - CLICK HERE

TARIFF MAN BRUISES EUROPEAN STOCKS - CLICK HERE

EUROPE BEFORE THE BELL: WATCH AUTO STOCKS - CLICK HERE

MORNING BID: DAS AUTO CAUGHT IN THE TARIFF CROSSHAIRS - CLICK HERE