Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

US Easter Data Wrap: US Leading Indicators Surge In March

Published 04/22/2014, 06:43 AM
Updated 03/19/2019, 04:00 AM
Traders may have kicked back during the Easter break but the holiday offered its fair share of economic data nonetheless. Not least, the US was active during the Easter break, with several interesting if not overly important numbers released. US: Leading indicators rose a robust 0.8 percent m/m in March (+0.7 percent expected) following a strong increase of 0.5 percent in February. As we have come to expect, the interest rate spread added significantly to the overall index, this time, 0.3 percentage points (pp). However, the average workweek (0.3pp) and initial jobless claims (0.2pp) also contributed significantly. The most negative contributor was building permits, which subtracted 0.1pp due to a 2.4 percent monthly decline to 990,000 permits last month. Chart 1 The overall increase in the index of 0.8 percent in March meant that the yearly change rose from 5 percent to 6.1 percent, the highest rate of change since July 2011. This seems to corroborate my view that the US economy will accelerate to (a bit below) 3 percent this year from 1.9 percent in 2013. Initial jobless claims were also reported, and rose slightly to 304,000 from an upward revised 302,000 beating consensus (315,000) handsomely. This saw the four-week moving average fall from 317,000 to 312,000, the lowest since August 2007. Even more crucially, last week's report covers the survey week for nonfarm payrolls (released next Friday, May 2) and points to another robust employment report. It is worth bearing in mind, however, that the relationship between these two series is noisy and that more labour-related data will be released ahead of the Employment report, including ISM manufacturing and ADP Employment. Chart 2 The April version of the Philadelphia Fed Business Outlook was also released, jumping to 16.6 from 9 earlier and 10 expected, with new orders and shipments both strong. The former rose from 5.7 to 14.8, the highest since October of last year, while shipments printed 22.7, and we have to go back to March 2011 to find a better number than that. The number of employees sub-index also rose a bit from 1.7 to 6.9 and the workweek index hit 5 from 3.1. All in all, a good report from Philadelphia although we should not put too much emphasis on the regional surveys. Chart 3 Lastly, the Chicago Fed National Activity index was released, falling to 0.2 in March (as expected by consensus) from 0.53 in February. It is worth keeping in mind though that February was revised up heavily from just 0.14 initially. The three-month moving average rose to 0 from -0.14, suggesting that the US economy grew at around trend pace in the first quarter. This index should only serve as a rough proxy of GDP and analysts are more sceptical of Q1 growth. Next Wednesday (April 30) the first estimate of Q1 GDP will be reported and consensus currently expects it to show growth of 1 percent quarter-on-quarter at an annualised rate. Chart 4

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.