The ECB cuts again/Claims, retail sales and Philly mfr'g surprise to the upside

No surprise from the ECB meeting and the rate cuts announced (deposit, refi and lending facility rates) and we await the press conference. European bond yields are slightly higher while the euro is down a touch. The wording in the statement did not pre-commit to what they might do at the next meeting after this 3^rd rate cut. While the ECB mandate is solely inflation, their main focus now seems to be the anemic economic growth the region is experiencing, especially with its biggest member, Germany.

For perspective, the current 3.25% deposit rate compares with September headline inflation of 1.7%, a core rate of 2.7% and services inflation of 3.9%.

After last week’s jump in initial jobless claims to a revised 260k (up 2k), in part due to the hurricane, it fell back to a still elevated 241k where the estimate was 259k. This raised the 4 week average to 236k from 232k. Delayed by a week, those still receiving continuing claims numbered 1.867mm as expected, up slightly from the prior week and still hanging around the highest level since November 2021.

Bottom line, the hurricanes and the life disruptions it has created has distorted the data of course but there has been an uptick in claims in non hurricane impacted states, particularly Michigan (maybe related to the automotive weakness I highlighted in my morning note) and the level of continuing claims remains elevated.