LIVE MARKETS-In case you missed it: Jobless claims, trade balance, housing starts/permits

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IN CASE YOU MISSED IT: JOBLESS CLAIMS, TRADE BALANCE, HOUSING STARTS/PERMITS

Three economic indicators were all but lost in the fog of the intensifying war on Iran. Distracted investors might be interested to hear that the labor market appears steady, the trade gap has narrowed, and groundbreaking on single-family homes has dropped.

Last week, 213,000 U.S. workers joined the queue outside the unemployment office USJOB=ECI, which was 1,000 fewer than the previous week and 2,000 shy of analyst expectations.

Ironing out weekly volatility, the four-week moving average of initial claims has a slight downward bias.

In the wake of Friday's weak employment report, the claims data could ease fears of a softening labor market. It could also, however, be symptomatic of the low-hire, low-fire mode suggested by recent JOLTS data, with companies reticent to hand out pink slips or increase their headcount amid economic and geopolitical uncertainties.

Ongoing jobless claims USJOBN=ECI, which are reported on a one-week lag, shrank by 1.1% to 1.850 million, in line with consensus. This metric remains elevated, coming at a time of weak hiring and consumer survey data that suggests laid-off workers are finding it increasingly difficult to find a replacement gig.

"The February jobs report hurt the jobs recovery narrative that was taking hold, though we prefer to take the average of the January and February jobs numbers since there are quirks in both datasets," says Oren Klachkin, financial markets economist at Nationwide. "From that perspective, the labor market isn’t falling apart."

Separately, the Commerce Department's international trade report USTBAL=ECI for January showed the difference in the value of goods and services imported to the U.S. and those exported narrowed by 25.2% to $54.5 billion.

Under the hood, exports surged by 5.5%, bouncing back nicely from December's 1.6% decline. But imports weakened by 0.7%, easing back from the prior month's 3.5% increase. The closely-watched trade deficit with China was essentially unchanged, at $12.7 billion

This appears to mark a fresh break from 2025, which logged the largest-ever goods trade gap.

While the initial tumult resulting from Trump's post-Liberation Day tariff announcements has subsided, the effects of U.S.-Israeli-led war on Iran have yet to show themselves in the data.

"It’s not until we receive the March or even the April data that we’ll start to see the impacts of the conflict on US exports and imports," Klachkin adds. "The situation is highly fluid, though for now we see exports suffering more than imports since the rest of the world is more exposed."

"A stronger dollar will also sap some export competitiveness."

Imports, which account for the lion's share of the United States' total international trade, are a GDP detractor, so January's rebound in exports and slightly weaker imports are early, positive harbingers for first-quarter GDP.

Turning to the housing market, groundbreaking on new American homes USHST=ECI jumped by 7.2% in January to 1.487 million units at a seasonally adjusted, annualized rate (SAAR), according to the Commerce Department.

That's a robust 10.3% stronger than the 1.348 million units SAAR analysts were expecting and builds on December's downwardly revised 4.8% increase.

Diving below the surface, however, single-family projects - which account for the lion's share of the total - actually fell by 2.8%, while the starts in the volatile multiple-unit segment offset that drop by surging an impressive 29.9%.

Matthew Martin, senior U.S. economist at Oxford Economics, says the decline in single-family starts was attributable, in part, to severe winter weather.

With that in mind, "the January data suggests stronger momentum than expected," Martin says. "Still, builders will need to work down their inventory of completed homes for sale before single-family starts rise on a sustained basis."

On the other hand, building permits USBPE=ECI - considered one of the housing market's more forward-looking indicators - dropped 5.4% to 1.376 million units SAAR, or 2.4% weaker than economists predicted.

Here, the multiple-unit segment suffered the brunt of it, sliding 12.4%, while permits for single-family projects dipped by 0.9%.

(Stephen Culp)

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