key data from the US session and GDP traker update - Nomura

Analysts at Nomura noted the key data from the US session.

Key Quotes:

"Initial jobless claims: Initial claims dropped sharply by 24k to 209k in the week ending 21 April, pointing to a healthy labor market. Continuing claims fell 29k to 1837k for the week ending 14 April. Strong incoming employment data stand in contrast to weakerthan-expected spending data on Q1. Continued decline in initial and continuing claims appear consistent with a tight labor market and steady job growth. Over the medium term, we continue to expect low readings as the labor market tightens further."

"Durable goods orders: New orders for core durable goods (excluding transportation equipment) were flat in March, below expectations (Nomura and Consensus: 0.5% m-om), with downward revisions to orders in February and January. Shipments of core capital goods (nondefense excluding aircraft) declined unexpectedly by 0.7% m-o-m in March with downward revisions to February and January estimates, pointing to weak business spending on equipment in Q1. The moderation in equipment investment from its elevated growth in Q4 will likely lower Q1 real GDP growth."

"Advance goods trade balance and inventories: The advance estimate of March trade deficit came in at $68.0bn, narrowing sharply from $75.9bn in February (Consensus: $75.0bn). Reflecting synchronized global economic growth, good exports increased a solid 2.5% m-o-m in March. However, goods imports dropped sharply by 2.1% m-o-m. The recent tariffs on steel and aluminum might have affected goods imports. Imports of industrial supplies fell by 1.9% m-o-m, probably reflecting the new tariffs. That said, the weakness in goods imports was not just concentrated on components that can be affected by the tariffs. We think that a large part of the decline in imports was transitory and expect a rebound in coming months as domestic demand remains strong. However, we should monitor incoming data to discern any impact from changes to trade policies. On the advance estimates of inventories for retailers and wholesalers, a 0.4% decline in retailers' inventories came in weaker than we had expected, while wholesale inventories continued to increase solidly by 0.5% m-o-m."

"GDP tracking update: While core capital goods shipments and retail inventories were weaker than expected, the sharp drop in goods imports was positive to our Q1 GDP tracking model. As a result, we revised up our Q1 GDP tracking estimate by four-tenths of a percent to 2.0%. Consistent with our tracking estimate, we now forecast 2.0% q-o-q saar for the BEA’s advance estimate of Q1 real GDP growth which will be released tomorrow."