03/03/22 Briefing

Economic Data Summary:

• Weekly Initial Claims 215K (Briefing.comconsensus 226K); Prior was revised to 233K from 232K; Weekly Continuing Claims 1.476 mln; Prior was revised to 1.474 mln from 1.476 mln

  • The key takeaway from the report is that initial claims are at a level that is consistent with a tight labor market.

• Q4 Productivity-Rev. 6.6% (Briefing.comconsensus 6.7%); Prior 6.6%; Q4 Unit Labor Cost - Rev. 0.9% (Briefing.comconsensus 0.3%); Prior 0.3%

  • The key takeaway is that the healthy increase in productivity in Q4 helped keep unit labor costs in check, but it isn't necessarily resonating as a celebratory factor given the steady acknowledgment of rising labor costs heard from companies reporting Q4 earnings.

• February IHS Markit Services PMI - Final 56.5; Prior 56.7

• February ISM Non-Manufacturing Index 56.5% (Briefing.comconsensus 61.0%); Prior 59.9%

  • The key takeaway from the report is that business activity was held back in February by inflation pressures, supply constraints, logistical challenges, and labor shortages.

• January Factory Orders 1.4% (Briefing.comconsensus 0.5%); Prior was revised to 0.7% from -0.4%

  • The key takeaway from the report is the uptick seen in order growth for nondefense capital goods, excluding aircraft -- a proxy for business spending.

Fed/Treasury Events Summary:

• Cleveland Fed President Loretta Mester CNBC interview this morning(voting FOMC member)

  • Ms. Mester said: The task before the Fed is to remove accommodation, the Ukraine situation does add uncertainty to economic outlook, it is good to start with 25 basis points in March, and then have further rate hikes in future months, and she thinks Fed can bring down inflation without causing harm to the economy.

• Fed Chairman Jerome Powell at Senate testimony says he is prepared to do what it takes to maintain price stability; sticking to plan to raise rates by 25 basis points at March meeting.

Upcoming Economic Data:

• February Nonfarm Payrolls due out Friday at 8:30 ET(Briefing.comconsensus 400K; Prior 467K)

• February Nonfarm Private Payrolls due out Friday at 8:30 ET(Briefing.comconsensus 390K; Prior 444K)

• February Avg. Hourly Earnings due out Friday at 8:30 ET(Briefing.comconsensus 0.5%; Prior 0.7%)

• February Unemployment Rate due out Friday at 8:30 ET(Briefing.comconsensus 3.9%; Prior 4.0%)

• February Average Workweek due out Friday at 8:30 ET(Briefing.comconsensus 34.6; Prior 34.5)