Treasury Yields Jump Amid Lower than Expected Jobless Claims, Rise in GDP Price Index

U.S. Treasury yields are testing their highs of the session on Thursday after data showed Preliminary GDP coming in below the forecast, but more importantly better than expected Weekly Jobless Claims figures once again highlighted the tight labor market. The Preliminary GDP Price Index also came in higher than expected, indicating a rise in stubbornly strong inflation.

US Preliminary Gross Domestic Product Report

The U.S. economy expanded at a 2.7% annual rate from October through December, a solid showing despite rising interest rates and elevated inflation, the government said Thursday in a downgrade from its initial estimate.

The government had previously estimated that the economy grew at a 2.9% annual rate last quarter.

The Commerce Department’s revised estimate of last quarter’s gross domestic product marked a deceleration from the 3.2% growth rate from July through September. While overall growth was solid in the fourth quarter, business spending barely rose, and consumers spent cautiously, suggesting that the economy lost momentum at the end of 2022.

Weekly US Jobless Claims Lower than Forecast

The U.S. jobs market remained tight, the latest weekly jobless claims data showed.

According to the Department of Labor, in seasonally adjusted terms the number of initial unemployment claims slipped by 3,000 to 192,000 over the week ending February 18.

Secondary claims, which are those not being filed for the first time and referencing the week ending Feb. 11, fell by 37,000 to 1.654 million.

GDP Price Index Jumps

The Preliminary GDP Price Index rose by 3.9% last quarter, up from 3.5% and much higher than the 3.5% forecast. The report suggests that inflation continues to be a problem.