US: Housing starts, jobless claims, JOLTS, and Philadelphia Fed in focus - Nomura

Research Team at Nomura suggests that the US session features February housing starts and permits, weekly jobless claims, JOLTS, and the March Philadelphia Fed which is likely to keep investors engaged in today’s US session.  

Key Quotes

“Initial jobless claims: Initial claims remain at historically low levels after a continued decline during the recovery. For the week ending 4 March, the 4-week average of initial claims rose only slightly to 237k from 234k (which was the lowest reading in decades). As labor market conditions remain healthy, we continue to expect this series to remain low.”

“Housing starts: We expect an increase of 1.9% m-o-m in housings starts for February, pushing up the annual rate to 1270k from 1246k in January (Consensus: +1.4% to an annual rate of 1264k). We expect some rebound in the volatile multi-family starts series after it fell sharply in January. For single-family starts, we expect a steady increase considering incoming data on single-family building permits and unusually warm weather in recent months.”

“Moreover, we expect a decrease of 1.8% m-o-m for building permits in February, bringing down the annualized rate to 1270k from a strong pace of 1293k in January (Consensus: -1.9% to an annual rate of 1268k). Higher mortgage rates since midNovember and tighter lending standards were likely negative for building permits data.”

“Philly Fed Survey: This business survey improved sharply in February to 43.3 from an already high 23.6 in January. The latest surge in this index was coupled with a sharp increase in the new orders index. Incoming data suggest that elevated sentiment likely sustained in March but data on actual spending did not show a clear sign of acceleration. As such, we expect a headline reading of 36.0 in March (Consensus: 30), which is still highly elevated although lower than the previous month’s reading.”

“JOLTS: Job openings decreased marginally in December from 5505k to 5501k, remaining around the six-month average of 5562k. The job opening rate remains elevated at 3.6%, slightly below the historical high of 3.9% from July 2016, but indicating continued demand from employers for new workers. However, the Conference Board’s Help-Wanted Online (HWOL) ads, covering online advertisements for job vacancies, posted an unexpectedly sharp drop of 360k. The Conference Board acknowledged that this decline may not reflect the overall trend for job postings as aggregate HWOL data continue to show a divergence from the healthy JOLTS vacancy numbers. Only a sustained decline in these series may be noteworthy. The steady readings in these indicators would suggest that the labor markets remain tight, in line with the FOMC’s assessment. Note that the Bureau of Labor Statistics will revise the JOLTS data to incorporate the annual updates to the employment report and new JOLTS seasonal factors.”