Jobless Claims Worry Some Investors

Jobless Claims - 2 Motor Vehicle Sales Reports

Before getting into jobless claims, let's review some vehicle sales reports. Because of the government shutdown, the motor vehicle sales reports from December and January were both released on Monday. 

This December report was solid, which helps Q4 GDP and the January report wasn’t. Meaning it hurt Q1 GDP estimates. The December report showed total vehicle sales were 17.5 million which was up from 16.6 million. Domestic vehicle sales were 13.5 million which was better than the previous 12.8 million.

The January report was weak as total vehicle sales were 16.6 million which missed estimates for 17 million. Domestic vehicle sales fell to 12.8 million. Domestic light truck sales fell from 9.5 million to 8.8 million. 

Jobless Claims - This vehicle sales report spells bad news for consumer spending. 

To be clear, this report wasn’t a disaster. Ever since early 2014, total vehicle sales have been between the mid 16 million range and the mid 18 million range. We’d need to see further weakness in the next few months before I would get worried about this data point.

On a theoretical basis, it’s interesting to contemplate how fewer reports affect the market. Some politicians have called for firms to report earnings twice per year instead of four times to eliminate short term thinking. 

That change probably won’t affect short term thinking because private firms can still do channel checks and measure results. 

Stocks still will trade every day. For firms with seasonal businesses, only a few months in the year matter anyway. In a more practical sense, when double reports come out, the most recent report is what matters. 

Essentially, when old reports show good news, the market missed out on the potential gains from them. Stocks were crashing in December, so some good reports could have helped the market stabilize.

Jobless Claims - Latest Q4 GDP Growth Guesses

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