JPMorgan Econ FI-United States-108164780.pdf

1MichaelFeroli(1-212)834-5523michael.e.feroli@jpmorgan.comJPMorganChaseBankNADanielSilver(1-212)622-6039daniel.a.silver@jpmorgan.comMichaelSHanson(1-212)622-8603michael.s.hanson@jpmchase.comMuratTasci(1-212)622-0288murat.tasci@jpmchase.comNorthAmericaEconomicResearch10May2024JPMORGANcontinuetomoderate(hitting3.7%inApril).Officialsarealsolikelymonitoringavarietyofinflationexpectationmea-sures,andthepreliminaryMayUniversityofMichiganreportshowedincreasedconsumerinflationexpectationsthismonth.WhilenotasimportantastheCPIreport,theAprilretailsalesdataalsowillbeusefultotracknextweek.Webelievetheheadlineincreased0.6%andweexpectmoremodestgrowthintheimportantcontrolgroup,withthisaggregateup0.2%.OtherreleasesnextweekincludeavarietyofMaybusinesssurveysandtheAprilIPreport.PowellisalsoscheduledtospeakonMay14andotherFedofficialswillmakeremarksatvariouspointsduringtheupcomingweek.ClaimsjumpisprobablynoiseInitialclaimsjumpedfrom209,000to231,000duringtheweekendingMay4,adisappointingprintthatshowedthehighestweeklylevelforclaimsfilingssincelastAugust.Wehadbeenexpectinganincreaseinfilingsinthisreport(althoughnotaslargeastheonethatwasactuallyreported)becausewethoughtthattheseasonaladjustmentofthedatawouldnotfullycapturetemporarychangesinfilingsthatwereassociatedwithschoolspringbreaks,andwecontinuetothinkthatthislatestincreaseinfilingsatleastpartiallyreflectsnoiseinthedata.AnincreaseinfilingsinNewYorkStatewasabigdriverofthenationalincrease(Figure1),andwethinkthatthemoveupinNewYorkwasatleastpartiallyrelatedtofilingsassociatedwithrecentschoolspringbreaksforNewYorkCitypublicschools.Theseasonaladjustmentprocesshasahardtimecorrectlyanticipatingtheswingsinfilingsthatcomearoundschoolspringbreaks(and“movingholidays”likeEasterandPassover),sotheseasonallyadjust-eddataoftenarenoisyaroundthistimeofyear.180200220240260Jan23Apr23Jul23Oct23Jan24Apr24Jul24000s,sawrFigure1:InitialjoblessclaimsSource:DepartmentofLabor,HaverAnalytics,J.P.MorganEx.NewYorkSteppingbackabit,weshouldalsokeepinmindthatthelat-estlevelofinitialclaimsfilingsisstillfairlylowbybroadhistoricalstandards,eventhoughitwasthehighestseeninseveralmonths.Continuingclaimsfilingsalsogenerallyhavebeenlowlately,andthelatestreportshowedrelatedfilingsincreasingfrom1.768mnto1.785mnduringtheweekendingApril27.Lowlevelsofjoblessclaimsfilingssuggestcontin-•Fedofficialsconfirmviewthatratehikesarenotthebaseline•Nochangeinourmainviewswithlimiteddatanews•Nextweek,welookforAprilcoreCPItobeup0.3%•Weforecastdecentretailsalesheadlinewithcontrolgroupup0.2%Theeconomicnewswasquietthisweekfollowingalotofeventsduringthepriorweekandaheadofabusyfewdaysofdatareportsscheduledfornextweek.Withlimitednewinfor-mation,ourmainviewontheeconomydidnotreallychange.WedidseecommentsfromavarietyofFedofficials,whohadtheopportunitytoupdatetheirviewsfollowingtheAprilemploymentreportfromMay3.Unsurprisingly,theredoesn’tappeartobeamajorreactioncomingfromtherelativelydov-ishnewsinthatreport.ThemessagesfromrecentFedspeakwerelargelyconsistentwithearliercommunication,asFed