The 7k U.S. initial claims bounce
The 7k U.S. initial claims bounce to a still-lean 230k reversed the 7k drop to a super-tight 223k (was 221k) in the first week of February to leave oscillations just above the 45-year low of 216k in the January BLS survey week. Holiday distortions are behind us, and claims have established a tight Q1 trajectory with disaster rebuilding, and expected boosts from tax reform and the budget bill. Claims are averaging just 228k thus far in February, following a cycle-low average in January 232k, versus prior averages of 242k in both November and December and 233k in October. Next week's February BLS survey week reading will likely exceed January's 216k, versus prior readings of 245k in December, 240k in November and 223k in October. Analysts expect a 200k February nonfarm payroll rise that repeats the 200k figure from January. Payrolls face upside risk from a tight path for claims and a firm trajectory for ADP through the 234k January rise, alongside robust consumer, producer, and small business confidence.