Jobless Claims See Unexpected Surge As PPI Shows More Inflation Coming

This morning we had two key economic readings, and the trend is for higher prices and a re-weakening of the employment situation.  The Labor Department released weekly jobless claims for the last week and it released the March wholesale inflation data via the Producer Pricing Index.

The headline or nominal PPI was reported as +0.7% and the core reading which eliminates food and energy came in at +0.3%.  Bloomberg was looking for headline data to come in at +1.0% and was looking for core-PPI to come in at +0.2%.

Jobless claims took an expected jump from 385,000 to 412,000.  Bloomberg has expectations at only 380,000.  The big disappointment here is that there was not adverse weather conditions and there was not a holiday to account for the move, yet we went back up over that key mental 400,000 threshold again for the first time in weeks.

If you measure the army of unemployed via the continuing claims, this looked a tad better but this data has a week lag that may explain the story better compared to the initial claims. These were revised from 3.72 million to 3.73 million, but the newest release showed a drop to 3.68 million.

Companies are talking about how they are going to finally have to pass higher prices on to the consumer level.  We’ll see by how much, but inflation pressures have been in place and now they are happening at a time when the labor situation improvements may be taking a break. 

JON C. OGG