Claims data/Goods deficit still reflects pull forward and what it means to shrink it

Initial jobless claims were little changed w/o/w at 224k vs 225k (revised up by 2k). That was about as expected. Continuing claims fell to 1.856mm, down from 1.881mm and below the estimate of 1.886mm.

Overall the bottom line remains pretty much the same as firing’s remain muted, as measured here, while the hiring pace has slowed evident in continuing claims still around the highest level in 3 1/2 years. The firing’s in the government sector does not show up in this data but any jobs lost with private contractor’s as result of the shrinking federal workforce would.

Reflecting the major pull forward of orders ahead of tariffs, the US goods trade deficit in February was a huge $147.9b vs $155.6b in January and compared to ‘just’ $104b in November. This also compares to about $90b in January and February in 2024. The estimate was $139b.

Keep in mind, in the attempt to shrink this deficit over time would mean making US production more cost competitive which would help to raise exports at the same time we’re making imports more expensive in an attempt to encourage us to buy more domestically. Will reshoring make us more competitive? A lot of automation will likely have to be a key influence. Domestically, will consumers be able to afford a continued rise in the cost of things made here? Hopefully.