US: Initial jobless claims, housing starts and Philly Fed survey in focus - Nomura

Research Team at Nomura suggests that the initial jobless claims, housing starts and Philly Fed survey will be the key economic releases in today’s US session.

Key Quotes

“Initial jobless claims: The latest reading of the initial jobless claims series was within the recent trend, in line with our view that labor market conditions remain tight and that involuntary lay-offs have been subdued. This series has been on a downtrend, although it has displayed some volatility around the holiday season. We would caution against reading too much into the recent fluctuation in this series.”

“Housing starts: Housing starts fell by 18.7% m-o-m to an annualized 1090k in November, driven by a sharp decline in multi-family housing starts. In December, we expect some positive payback in multi-family housing starts. However, incoming data suggest that single-family starts may have slowed. In particular, aggregate hours worked in residential construction fell 1.3% in December, implying some slowdown in home building activity. Altogether, we expect housing starts gain by 0.9% to an annualized 1100k in December (Consensus: 9.0% increase to an annualized 1188k). We forecast building permits to grow 2.3% growth to an annualized rate of 1240k in December (Consensus: 1.1% increase to an annualized 1225k).”

“Philly Fed Survey: The Philly Fed index jumped strongly to 19.7 in December, which was revised downwards from 21.5 in annual revisions. The new orders index was elevated at 14.9 and the unfilled orders index was up 0.3pp to 3.6, suggesting that survey respondents had an optimistic near-term outlook. In contrast, incoming data on actual economic activity have not picked up strongly, suggesting that it may be possible that the slow improvement in real data could have affected post-election optimism. For this reason, we expect that the Philly Fed index did not improve further and forecast a print of 16.0 for January (Consensus: 15.3).”