LIVE MARKETS-We gather together to parse the day's data

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WE GATHER TOGETHER TO PARSE THE DAY'S DATA

As the nation prepares to pay homage to the pilgrims by baking green bean casseroles and pecan pies, a nice helping of economic data (some of it past its sell-by date because of shutdown delays) gave investors something to chew on.

Last week, 216,000 U.S. workers joined the queue outside the unemployment office USJOB=ECI 2.7% fewer than the previous week and 9,000 fewer than analysts expected.

Ironing out weekly volatility, the four-week moving average of initial claims continues to drift sideways in the 220,000 zone, with a slight downward bias. That's comfortably within the range associated with healthy labor market churn.

At any rate, the recent, impossible-to-miss increase in corporate layoff announcements is yet to make itself seen in the claims data.

But the lower-than-expected initial claims number isn't fooling Samuel Tombs, chief U.S. economist at Pantheon Macroeconomics.

"The latest claims data indicate hiring remains too weak to absorb the low numbers of people losing their jobs," he writes. "The recent pick-up in Challenger’s measure of layoff announcements hints at a rising jobless rate in the coming year.

Continuing jobless claims USJOBN=ECI reported on a one-week lag, edged 0.4% higher to 1.960 million, or 9,000 shy of consensus. Ongoing claims remain high, supporting consumer survey data that suggests laid-off workers are finding it increasingly difficult to find a replacement gig.

"Unemployment likely is rising faster than the claims data would usually imply," Tombs adds. "The renewed deterioration in the job availability differential within the Conference Board’s consumer confidence survey in November also suggests that the unemployment rate is continuing to climb."

The Commerce Department kindly released a blast from the past in the form of its September durable goods report.

It showed new orders for long-lasting, U.S.-made goods USGDN=ECI increased by 0.5% two months ago, stronger than the 0.3% gain predicted by economists, but marking a sharp deceleration from August's 3.0% growth.

This time, it was all about war machinery.

A drilldown into the report - which covers everything from air fryers to attack drones - finds that a 23.0% increase in defense-related capital goods (particularly a 30.9% surge in defense aircraft) was largely responsible for the gain. Remove defense-related items, and new orders would have eked out a paltry 0.1% gain. Also contributing to the upside was a 3.5% increase in communications equipment and a 1.4% gain in primary metals. Commercial aircraft orders dropped 6.1%.

Core capital goods - which exclude aircraft and defense items and is considered a barometer of U.S. corporate capex plans - increased by 0.9%, a repeat of August's upwardly revised number and significantly more robust than the 0.2% street projection.

"The muted gain in September durable goods orders was anticipated," writes Bernard Yaros, lead economist at Oxford Economics. "But the strength in core orders, a better gauge of future business spending, reinforces our optimism for solid growth in equipment investment in the next quarters."

Finally, financing home loans grew more expensive last week; nevertheless, would-be buyers stepped up, according to the Mortgage Bankers Association (MBA).

The average 30-year fixed contract rate USMG=ECI added 3 basis points to land at 6.40%.

Even so, applications for loans to purchase homes USMGPI=ECI counterintuitively jumped 7.6%. That was very nearly nullified by a 5.7% drop in refi demand, USMGR=ECI which accounted for a decreasing 53.4% share of total mortgage activity.

Combined, total mortgage demand inched a negligible 0.2% higher.

But headwinds persist.

"Despite slowing home-price growth and lower mortgage rates, affordability remains a challenge in many markets," said Joel Kan, MBA’s deputy chief economist. "Given that many borrowers have been looking to capitalize on rate drops, refinance applications last week declined almost 6 percent to the slowest weekly pace since September."

The 30-year fixed rate currently sits 46 basis points south of where it was a year ago.

Purchase and refi demand have risen by 18.8% and 117.3% over the same time period.

(Stephen Culp)

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