Housing Starts Miss Analyst Estimates, Initial Jobless Claims Stay Below 200,000

Key Insights

• Initial Jobless Claims declined from 195,000 to 194,000. 
• Housing Starts decreased by 4.5% in January. 
• Building Permits grew by just 0.1% in January.

Initial Jobless Claims Stay At Low Levels

On February 16, U.S. released Initial Jobless Claims report for the week ending February 11th. The report indicated that 194,000 Americans filed for unemployment benefits in a week, compared to analyst consensus of 200,000.  The previous report was revised from 196,000 to 195,000.

Initial Jobless Claims remain below the 200,000 level since early January. The report highlights the health of the job market, which remains strong despite recession worries.

Low Initial Jobless Claims may serve as an additional argument to push the federal funds rate above the 5.00% level, although the Fed will evaluate all available data.

Continuing Jobless Claims increased from 1.68 million to 1.696 million, mostly in line with the analyst consensus. While Continuing Jobless Claims are moving higher, the pace of the move is slow. It remains to be seen whether it will have any impact of Fed’s decision making.

Housing Starts Decline For Fifth Month In A Row

U.S. has also released the Housing Starts report for January. The report showed that Housing Starts declined by 4.5% on a month-over-month basis, compared to analyst forecast of -1.2%.

Building Permits increased by 0.1% month-over-month in January, compared to analyst forecast of 2.8%.

Both reports indicated that the housing market remained under pressure due to high interest rates. It remains to be seen whether the housing market will be able to get more support in the upcoming months as the Fed continues to raise rates.

S&P 500 remains under significant pressure in premarket trading after the release of the economic reports. The higher-than-expected PPI data served as an additional bearish catalyst for the stock market. Meanwhile, the U.S. Dollar Index moved back above the 104 level as traders bet on a more hawkish Fed.

For a look at all of today’s economic events, check out our economic calendar.