US: Focus on jobless claims and productivity data - Nomura

Analysts at Nomura suggest that US output likely increased strongly in Q3, according to their official forecast of 2.9% q-o-q saar.

Key Quotes

“However, BLS data on aggregate hours in the private sector point to some softness during the quarter, increasing only 0.6% q-o-q after a strong 3.1% increase in Q2. Thus, the preliminary reading of productivity in Q3 from the BLS could show an above-trend increase. Part of the softness in aggregate hours during the quarter was likely attributable to transitory disruptions due to inclement weather. Thus, over the medium term, we still expect productivity growth to be constrained by reduced business dynamism and other structural headwinds.”

“Initial jobless claims: Initial unemployment claims in the week ending 21 October reached the lowest point since March 1973 as the transitory impact caused by the recent hurricanes subsided. However, power outages in Puerto Rico and the Virgin Islands after Hurricane Maria disrupted the electronic filing process, which would have significantly delayed increases in unemployment claims. Although we continue to expect initial claims to remain low given strong labor market conditions, delayed filling in affected areas could increase uncertainty on upcoming readings.”