LIVE MARKETS-Tuesday data dump: Hires slide, consumer gloom lifts, home price growth cools

By Stephen Culp

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TUESDAY DATA DUMP: HIRES SLIDE, CONSUMER GLOOM LIFTS, HOME PRICE GROWTH COOLS

Investors were treated to a mixed bag of economic data on Tuesday, highlighted by a drop in hiring, an uptick in consumer sentiment and a cool-down in home price growth.

Job openings in the United States decreased by 4.9% in February to 6.882 million, according to the Labor Department's Job Openings and Labor Turnover Survey (JOLTS) USJOLT=ECI.

That's 36,000 fewer than analysts were expecting, and follows January's upwardly revised 7.240 print.

The JOLTS report, which tracks labor market churn, also showed hires fell by about 9.3%.

"The highlight of the February JOLTS report was the decline in the hiring rate, which fell to its lowest level in nearly six years," writes Matthew Martin, senior economist at Oxford Economics.

Noting that the data predates the Iran war, which Martin believes "will test the labor market," he adds that "Weaker household spending and uncertainty are likely to influence firms' hiring intentions and delay any rebound in the hiring rate."

Firings rose by 3.7%, while quits dropped by 5.0%. The quit rate - a metric often associated with consumer expectations - dropped to 1.9% of the workforce from 2.0%, suggesting workers are more reticent to walk away from gigs and suggesting a deterioration of labor market confidence.

Speaking of which, the mood of the American consumer, who shoulders about 70% of the U.S. economy, unexpectedly brightened (or, more accurately, grew a bit less dire) this month.

The Conference Board's (CB) consumer confidence index USCONC=ECI gained 0.8 point to 91.8, the most cheerful reading since October.

Analysts projected a reading of 88.0.

Digging deeper, survey participants' assessment of present conditions improved by 3.9%, while near-term expectations weakened by 2.3%.

The "jobs confidence" element of the report - which subtracts "jobs hard to find" from "jobs plentiful" - showed a slight improvement, in opposition to the drop in hiring shown in the Labor Department's JOLTS report:

Moving to the housing market, home prices in major U.S. cities increased by 0.2% in January, an abrupt deceleration from December's 0.5% increase and a bit cooler than the 0.3% growth economists predicted.

Year-on-year, the Case-Shiller 20-city composite USSHPQ=ECI increased by 1.2%, also lower than consensus and marking a 0.2 percentage point slowdown from the prior month.

"January's results show home price gains continuing to cool," says Nicholas Godec, head of fixed income tradables and commodities at S&P Dow Jones. "Price levels remain elevated, but the rate of appreciation has slowed materially."

"With 30-year mortgage rates still near 6%, affordability constraints show no sign of easing. Nominal prices are barely rising; in real terms, they are edging lower," Godec adds.

Among the cities in the composite, New York and Chicago once again led the year-over-year gainers, rising 4.9% and 4.6%, respectively. Alas, poor Tampa was yet again the biggest loser for the 14th month running, with home prices in Cigar City dipping 2.5% from a year ago.

Finally, Midwest factory activity showed an abrupt loss of upward momentum this month.

MNI Indicators' Chicago purchasing managers' index (PMI) USCPMI=ECI shed 4.9 points to print at 52.8, retreating from February's multi-year high. Economists predicted a shallower, 2.7-point deceleration to an even 55.

Reminder: 50 is the magic PMI border dividing contraction and expansion.

Market participants will get a clearer picture of the state of U.S. manufacturing on Wednesday, when the Institute for Supply Management (ISM) releases its nationwide PMI.

Analysts expect that report to show U.S. factory activity expanded at a slightly faster pace, inching up to 52.5 in March from February's 52.4.

(Stephen Culp)

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