US DATA: Initial Claims Jump Led By Texas, But Continuing Stabilizing
Sep-11 13:05
Initial jobless claims surprisingly jumped to 263k (sa, cons 235k) in the week to Sep 6 after a slightly downward revised 236k (initial 237k).
- Note that in the NSA jobless claims details, national claims increased 7.9k on the week but 15.3k of that came from Texas. It clearly stands out compared to recent years (see chart) and thus could be an outlier, but of course it is a major state and so can’t easily be written off.
- There is no explanation in the BLS release, but one theory is that it is a a knock-on effect the heavy Texas flooding in July (albeit that was almost 2 months ago).
- Keeping that potential idiosyncratic Texas boost in mind, the four-week average pushed 10k higher to 241k for its highest since June.
- As always, we prefer to use this average when looking at recent trends but it’s still notable that the weekly initial claims data are at their highest since 2021.
- Continuing claims on the other hand surprised lower at 1939k (sa, cons 1950k) in the week to Aug 30 after a slightly downward revised 1939k (initial 1940k). Those are the joint-lowest continuing claims since the first week of June, and down from the July high of 1,946k.
- On a non-seasonally adjusted basis, initial claims rose 8k to 205k, with continuing falling 78k to 1,815k. The recent downshift in continuing is seasonally typical, but initial claims picked up a little more and a little earlier than in previous years (as suggested by the SA vs NSA) - again some of this is down to the Texas spike.
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US-CHINA: China Orders Companies To Halt NVIDIA Chip Orders
Aug-12 13:04
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US: State Department Human Rights Report To Ramp Up Pressure On Brazil
Aug-12 13:02
The Washington Post reports that the Trump administration will “significantly escalate” criticism of Brazil and South Africa in the State Department’s annual human rights reports, scheduled to be transmitted to the US Congress today.
- According to a memo seen by The Post, the reports are expected to target the South African government for its alleged mistreatment of White Afrikaner farmers and the Brazilian government for its alleged persecution of former president Jair Bolsonaro.
- The Brazil report could further damage the prospect of a trade agreement with the US. The Post notes that the draft report specifically flags Brazilian Supreme Court Justice Alexandre de Moraes' social media directives, which the Trump administration claims targeted Bolsonaro supporters, and were a primary justification for hitting Brazil with the highest tariff rate of 50%.
- The Financial Times notes: "Trump has shown in the past a capacity to swiftly change tack, so no dispute with his administration is ever intractable. But the stand-off between the US and Brazil will not be easy to resolve — and could easily escalate."
- Indeed, Brazilian President Luiz Inácio Lula da Silva appears to have opted for closer ties with allies in the BRICS bloc over addressing Washington's concerns with Bolsonaro's treatment and trial.
- Rubens Ricupero, a former ambassador to Washington, said: “Everything seems to suggest that Bolsonaro will be found guilty. So you have to assume that a very tense situation between Brazil and the United States is going to deteriorate further.”
US DATA: Core CPI Categories Lean Soft Vs Expectations, Especially Goods
Aug-12 12:57
Core categories leaned soft vs expectations. As noted, shelter prices were roughly in line with expectations.
- Looking at core goods, they were much softer than expected at 0.21% vs 0.39% MNI median - and that's despite a higher-than-anticipated 0.48% M/M rise in used car prices (0.30% expected) for the fastest rise in 5 months after 4 months of sharp deflation.
- Overall ex-used vehicles goods inflation came in at 0.17%, about half of June's rate (0.32%) though still elevated by historical comparison (averaged 0.0% in the 12 months prior to June).
- Apparel prices were soft at 0.07% M/M (0.5% expected), with medical care commodities and new vehicle prices flat M/M (albeit the first non-negative reading in 4 months). Household furnishings and supplies - another tariff-sensitive area - rose 0.7% but that was a little softer than the 1.0% printed prior.
- Core services were on the high side at 0.36% M/M (0.29% expected) however, with strength in airfares (4.0% M/M vs 1.5% expected) which recall comes from PPI for the PCE report; conversely lodging remained soft at -1.0% (flat expected) with auto insurance roughly in line at 0.1%.
- There was some strength in medical care services however, which picked up to 0.8% M/M (0.6% prior), led by dental (2.6%) and professional medical services (0.8%). These were some of the largest rises in years in these categories - for dental it was a record high and came after +1.3%, notable for a PCE-input category.
- Communications were soft at -0.3% for a 3-month low after 0.0% prior.
