Initial Jobless Claims At 414K, 10th Consecutive Week Above 400K; Housing Starts At 560K, Both Modestly Better Than Expected

While this morning litany of economic news was modestly better than expected, it really did nothing to change the picture that the US is rapidly regressing into another recession. Initial claims came at 414K, better than expectations of 420K, but as always expect next week's number to be revised higher to 418K or so: last week's number was as always pushed up from 427K to 430K. Far more importantly, this is the 10th consecutive week in which the initial claims data prints over 400k. Bullish? Continuing claims was just worse than the consensus of 3,670K, at 3,675K, down from an upward (of course) revised 3,696K from 3,676K. The biggest change was attributed to New York state, where 4,060 fewer layoffs were seen in the construction, mfg and retail industries, followed by California with 2,510 fewer claims due to a "Shorter work week, as well as fewer layoffs in the service industry." So shorter work weeks are now economic positive. Lastly, on the claims front, the 99 week cliff is pushing ever more people from under the government subsidy wing as 115K people dropped from ongoing EUC and Extended Benefits. The EUC 2008 number is 3,293,507 compared to 4,798,009 a year ago: nearly 1.5 million people have now lost the weekly government check to sit around and look for jobs. Looking at housing starts, the seasonally adjusted annualized number for May was 560,000, just above the 541,000 from April, although below the 580,000 from May 2010. Consensus expected 545K new home starts for the month, or a 4.2% increase from the unrevised April number of 523K. In other words, the starts data was both a miss and a beat, depending on what the baseline used is: revised or unrevised. On an unadjusted basis, there were 55.6K units in May started on, with multi-family units jumping to 13.1K, the highest since September 2010's 13.2k. Lastly, the Q1 current account balance, a largely delayed and irrelevant number, came at -119.3 billion, on expectations of -130 billion.

Bottom line: horrible data that came just better than expected. Which is why the market is largely ignoring it and once again focusing on the only thing that matters: the EURUSD.