Bond Market Update

Data Recon

• Initial jobless claims for the week ending December 14 decreased 22,000 to 220,000 (Briefing.com consensus 237,000). Continuing jobless claims for the week ending December 7 decreased 5,000 to 1.874 million.
  • The key takeaway from the report is the low level of initial jobless claims, which connotes a reluctance on the part of employers to layoff staff.
• The third estimate for Q3 GDP included an upward revision to 3.1% (Briefing.com consensus 2.8%) from the second estimate of 2.8%. The GDP Deflator was left unchanged at 1.9%, as expected.
  • The key takeaway from the report is that it is dated (we're less than two weeks away from the end of the fourth quarter); however, the report speaks to the enduring -- and surprising -- strength of the U.S. economy despite the Fed raising rates 12 times between March 2022 and July 2023.
• The December Philadelphia Fed Index checked in at -16.4 (Briefing.com consensus 3.0) following a -5.5 reading for November. The line between expansion and contraction for this series is 0.0.
  • The key takeaway from the report is that manufacturing activity in the Philadelphia Fed region contracted in December at a faster pace than the prior month.
• Yield Check:
  • 2-yr: -4 bps to 4.31%
  • 3-yr: -2 bps to 4.33%
  • 5-yr: +2 bps to 4.40%
  • 10-yr: +5 bps to 4.54%
  • 30-yr: +7 bps to 4.72%