Mixed Economic Data Leaves Rates Little Changed

Rates little changed following a slew of economic data

Treasury yields and swap rates ended the data-heavy day little changed – the 10-year UST yield closed less than a bp higher at 1.49%.  US equity indices closed in the green – the S&P 500, DJIA, and Nasdaq increased 0.6%, 1%, and 0.7%, respectively.

First-quarter GDP estimated to be 6.4%

Earlier today, the Bureau of Economic Analysis estimated Q1 GDP was up 6.4% vs. 4.3% in Q4 2020.  According to the report, the jump “reflected increases in personal consumption expenditures (PCE), nonresidential fixed investment, federal government spending, residential fixed investment, and state and local government spending that were partly offset by decreases in private inventory investment and exports. Imports increased.”  The pace of economic growth is expected to have accelerated in Q2, with the headline forecast currently at 10%.

411,000 jobless claims were filed last week

The figure held above the 400,000 threshold for a second week in a row, declining by only 7,000 from the week prior.  The current number of claims is still double the pre-pandemic weekly average.  The pace of the labor market recovery has been closely watched by Fed officials, and claims have oscillated in a tight range for the past few weeks.

Durable goods orders increase 2.3% in May

Following April’s surprise 1.3% decline, new orders rebounded last month.  Much of the rise was due to a jump in demand for transportation equipment, which increased by 7.6% after 2 straight months of decline.  Excluding transportation, orders were up only 0.3%, falling behind April’s 1% rise.