Today's U.S. reports
Today's U.S. reports revealed a big March retail sales rebound that finally reversed the mysterious December sales plunge, hence greatly diminishing the "hard data" support for the market's pessimistic growth outlook from December. Analysts saw a 5k initial claims drop to a third consecutive 49-year low of 192k in the BLS survey week that extended the 5k drop to 197k (was 196k), as claims plunge further below the 2018 cycle-low of 208k last September. It's hard to attribute this massive three-week claims plunge to a seasonal distortion from this year's late Easter. The Philly Fed slipped in April to 8.5 from 13.7 in March and a 33-month low of -4.1 in February, while the ISM-adjusted measure similarly fell to 54.5 from a 5-month high of 55.8 in March and a 2-year low of 51.9 in February. Analysts saw a 0.3% February business inventory gain that further lifted our Q1 GDP estimate, though the timing of the inventory slowdown through March, which also faces a Boeing inventory bounce, will dictate how GDP growth is distributed between Q1 and Q2. Analysts saw a 0.4% rise in the March leading indicators index, and a rise in the weekly Bloomberg Consumer Comfort Index to 60.3 from 59.8. Analysts raised our Q1 GDP growth estimate to 2.6% from 2.2%, and still expect 3.0% growth in Q2. The tight claims path and firm sentiment levels support our 190k April nonfarm payroll estimate.