LIVE MARKETS-Thursday data jamboree: Jobless claims, flash PMI, existing home sales

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THURSDAY DATA JAMBOREE: JOBLESS CLAIMS, FLASH PMI, EXISTING HOME SALES

After the first part of the week offered scant economic data, investors were treated to three indicators on Thursday. Combined they offered assurances that the U.S. economy is chugging along despite persistent policy uncertainties.

Last week, 227,000 U.S. workers joined the queue outside the unemployment office USJOB=ECI, marking a slight, 0.9% weekly downtick and landing just 3,000 shy of consensus.

Initial claims remain low and rangebound, with the four-week moving average of initial claims moving essentially sideways, with a slight upward bias.

The data is "little changed from previous weeks, but weak hiring indicators point to a deterioration soon," says Samuel Tombs, chief U.S. economist at Pantheon Macroeconomics, who adds that it's "hard to argue a renewed upward trend has emerged yet. Accordingly, it is touch and go whether the FOMC will see enough evidence of labor market weakness to ease policy in July."

On the other hand, ongoing jobless claims USJOBN=ECI, reported on a one-week lag, rose 1.9% to 1.903 million, or 18,000 more than analysts expected.

Continuing claims remain elevated - the pre-COVID average was around 1.7 million - and support recent consumer survey data suggesting that "workers who lose their jobs are finding it tougher to find new employment," according to Nancy Vanden Houten, lead U.S. economist at Oxford Economics.

S&P Global's advance "flash" April purchasing managers' indexes (PMI) showed the expansion of U.S. business activity is unexpectedly accelerating this month.

The manufacturing USMPMP=ECI and the services sector USMPSP=ECI both landed at 52.3, both picking up some steam in the wake of April's barely-expansive readings of 50.2 and 50.8, respectively.

A PMI number north of 50 signifies business activity expanded compared with the previous month.

New orders increased, expectations improved and survey participants stocked up on inputs over tariff-related worries. On the other hand, employment slipped and the average price for goods and services surged to levels not seen since August 2022.

"Business confidence has improved in May from the worrying slump seen in April, with gloom about prospects for the year ahead lifting somewhat thanks largely to the pause on higher rate tariffs," says Chris Williamson, S&P Global's Chief Business Economist. "However, both sentiment and output growth remain relatively subdued, and at least some of the upturn in May can be linked to companies and their customers
seeking to front-run further possible tariff-related issues, most notably the potential for future tariff hikes after the 90-day pause lapses in July."

Turning to the housing market, the sales of pre-owned U.S. homes USEHS=ECI unexpectedly dipped by 0.5% in April to 4.00 million units at a seasonally adjusted annualized rate (SAAR), according to the National Association of Realtors (NAR).

That's 2.4% shy of the 4.10 million units SAAR predicted by economists.

Single-family home sales, which account for the lion's share of the total, inched 0.3% lower, while volatile condo/co-op sales dropped 2.6%.

The median home price surged 2.7%.

The supply of existing homes on the market jumped 9.0%. At April's pace it would take 4.4 months to sell every home on the market, up from 4.0 from March.

"Pent-up housing demand continues to grow, though not realized," writes Lawrence Yun, NAR's chief economist. "Any meaningful decline in mortgage rates will help release this demand."

"With the highest inventory levels in nearly five years, consumers are in a better situation to negotiate for better deals," Yun adds.

(Stephen Culp)

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