Data: PPI = SOFT, Jobs Market = CRACKING 🥶

GM and BRRR.

More data hit the tape this morning, with April’s producer price index (PPI) and initial jobless claims released premarket.

PPI came in softer than expected at 2.3% vs 2.4%, and jobless claims surprised to the upside at 264k vs 245k expected.

Both data points give the Fed reason to believe that inflation is slowing down while the job market is undergoing stress. This combo improves the likelihood of a Fed pivot - a full pause on interest rate hikes with an eye towards a full reversal in the near future.

With that forecast we’d expect markets to rally - but that hasn’t been the case in early trading with markets broadly unchanged. Let’s see how the rest of the week plays out.

To compound this bizarre economic environment, the struggling PacWest Bank shares are down 20% this morning as they announced 9.5% of their customer deposits were withdrawn last week.

 
Here’s what we brrr’d today:

• Unemployment Claims: Labor Market’s Roller Coaster Ride Continues

• Fighting Inflation: PPI Nears Target, Concerns Remain

Unemployment Claims: Labor Market's Roller Coaster Ride Continues

• Job Market Cracks: Recent data from the Labor Department shows a sharp rise in applications for US unemployment benefits, reaching the highest level since October 2021.

• DOL Admits Misrepresenting Claims Print: The Department of Labor (DOL) admits to misrepresenting claims print through incorrect seasonal adjustments, raising doubts about the accuracy of job market statistics and undermining confidence in the reported data.

• 5th Consecutive Jobs Opening Report Below Expectations: In an ongoing trend, the job market continues to struggle as job openings fall below expectations for the fifth consecutive time. This persistent shortfall indicates ongoing challenges in employment opportunities.

• State-by-State: Massachusetts (MA) and California (CA) observe significant increases in jobless claims, reflecting stress in their respective job markets. Conversely, Kentucky (KY) and Colorado (CO) witness notable drops, suggesting some positive developments in those regions.
  ZeroHedge & MSN

Encouraging Signs in Inflation Battle: PPI Nears Target, Concerns Remain

• Inflation Eases: In April, inflation, as measured by the producer price index, decreased to a 2.3% annual rate, indicating a moderation in price growth.

• Wholesale Prices Inch Up: The Bureau of Labor Statistics reported a slight 0.2% increase in the month-to-month wholesale price index, reflecting a modest rise in wholesale prices.

• Fed Remains Hopeful: The PPI report brings positive news as it shows inflation hovering around the Federal Reserve's 2% target, suggesting a relatively stable price environment.

• Inflationary Pressures Subside: The decline in the producer price index indicates a reduction in inflationary pressures, attributed to the Federal Reserve's campaign to curb economy-wide spending through interest rate hikes.

• Lingering Inflation Challenges: Core inflation, which excludes food, energy, and transportation, stood at a 3.2% annual rate in April, signifying ongoing inflation challenges that affect businesses and households.

  Washington Examiner

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