Initial Jobless Claims Jumped 28,000 to Two-Year High of 261,000… More than 11,000 of the increase was in just two states, California, and Ohio.
What it means— With tech company layoffs, California makes sense, but Ohio? After the massive unemployment fraud debacle in Massachusetts a few weeks ago, this looks suspicious, and continuing claims, which fell by 37,000 to 1.76 million, don’t support it. Finally, the initial jobless claims are seasonally adjusted. Without that statistical tweak, jobless claims were just 219,391, up from 208,856 the week before. With the Memorial Day holiday sandwiched in between, we’ll give this another week or two before we call it a warning sign. Besides, the central bankers of the Fed have long since decided what they’re going to do next week, whether that’s a small hike or skipping this month. Unless consumer prices do something surprising, this month’s decision is in the bag.
Atlanta Federal Reserve GDP Now Model Forecasts Second-Quarter GDP Growth of 2.2%… The model jumped to almost 3% on housing starts and existing home sales, and then eased on personal consumption expenditures.
What it means— The model incorporates the latest economic releases into its forecast, which means that it runs a month behind, as we get numbers from May reported in June. It’s still the most accurate model which is why we watch it. With decent employment numbers and solid industrial production, there’s not much on the horizon flashing the danger sign. But the fat lady hasn’t taken the stage. We have to see how recent Fed hikes, quantitative tightening, and rebuilding the Treasury Department’s Treasury General Account will affect the economy before we write off a recession.
Chinese Imports and Exports Fall 4.5% and 7.5%, Respectively, in May… After jumping at the start of the year, Chinese imports and exports weakened, showing weak demand domestically and across developing countries.
What it means— Well, that’s not a good sign. The Chinese economy shot out of the gate this year as the government loosened COVID-19 restrictions. At the time, we couldn’t know which way it was going to go. Would the nation supercharge global growth and bolster property spending, or would it be a short spending surge that quickly faded? We’re getting the answer. The numbers reported show that trade in May in the port of Shanghai fell further than it did during COVID-19 restrictions. That’s not good for growth, but it might keep the Chinese property market from building another price bubble. Of course, that still leaves them with tens of millions of empty apartments. We’ll see if they can thread the needle between cooling the markets and bankrupting developers.
Saudi Arabia Announces Another One-Million-Barrel Oil Production Cut… The latest cut is in addition to the 500,000 barrel per day cut from April that is set to go through 2024.
What it means— If at first you don’t succeed… The Saudis want oil prices to remain high even as global economic growth slows down. There was a time when oil prices would fall into the $40s or even $30s (per barrel) as the world economy slowed, which helped consumers recover by spending less on energy. Remember those days? Now, the members of OPEC+ don’t seem concerned about consumers in other countries; they’re determined to (and feel free to) squeeze as much cash out of us as they can. So far, they’re right. Western nations aren’t rushing to bring new oil and gas production online, which leaves us at the mercy of OPEC+, again.
In Australia, Feral Hog Takes 18 Beers from Campground Before Starting Fight With Cow… Feral hogs have become a national nuisance in Australia where an estimated 24 million of them run free. In part due to the hogs, the country has the highest estimated mammal extinction rate in the world. But one hog goes after more than other mammals: it’s trying to score beer. In a campground at De Grey River in Port Hedland, Australia, a camper watched a feral hog make off with 18 beers. Afterward, the hog rooted through trash for something to eat, and then got into a scuffle with a cow, which was a bad idea, because cows usually win such contests. The hog retreated into the river, which also might have been a bad idea. The jump in the feral hog population has led to a surge in the alligator population, which feed on the hogs. There’s no report on it, but this hog’s night out might have ended badly.
Data supplied by HS Dent Research
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