LIVE MARKETS-Blame it on blizzards: Jobless claims, existing home sales

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BLAME IT ON BLIZZARDS: JOBLESS CLAIMS, EXISTING HOME SALES

Analysts are quick to blame the upward trend in jobless claims and tumbling home sales on the miserable sub-zero blizzardfest in recent weeks.

Last week, 227,000 U.S. workers joined the queue outside the unemployment office USJOB=ECI, marking a 2.2% drop from the previous week's upwardly revised 232,000.

That's 5,000 more than analysts were expecting.

But ironing out weekly volatility, the four-week moving average of initial claims now shows a gradual but unmistakable upward bias, while remaining within the range associated with healthy labor market churn.

While rotten winter weather could have contributed to the upturn, some see it as evidence that last year's softening could be extending into 2026.

The data "suggest that the labor market remains just as subdued as last year, casting further doubt over the sustainability of January’s reported jump in payrolls," writes Samuel Tombs, chief U.S. economist at Pantheon Macroeconomics, adding that "we expect the unemployment rate to drift slightly higher this year, reinforcing the case for the Fed to ease policy further."

Ongoing jobless claims USJOBN=ECI, which are reported on a one-week lag, moved in the other direction, increasing by 1.1% to 1.862 million, or 12,000 more than economists anticipated. 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 low hiring rate is still the most concerning aspect of the current labor market," says Nancy Vanden Houten, lead economist at Oxford Economics.

Pivoting over to the housing market, the sales of pre-owned U.S. homes USEHS=ECI plunged 8.4% in January to 3.91 million units at a seasonally adjusted annualized rate (SAAR).

That's the steepest monthly drop in almost four years to the lowest reading since September 2024.

The number also marks an obliterative reversal of December's downwardly revised 4.4% gain and lands a sizable 270,000 units shy of consensus.

Drilling down, single-family home sales - which represented about 90.3% of total existing home sales - tumbled 9.0%. The volatile condo/co-op segment retreated by 2.6%.

While NAR shows a slight decrease in the number of homes on the market, at January's decelerated sales pace, it would take 3.7 months to sell every home on the market, up from 3.5 months in December.

Again, fingers are quick to point at old man winter.

"Many analysts will chalk this drop up to the bad weather. But the harsh winter storms that hit large parts of the country towards the end of January will have had a limited impact on existing home sales, which are recorded when contracts close rather than when they are signed," says Oliver Allen, senior U.S. economist at Pantheon.

The most recent data from the Mortgage Bankers Association shows the average 30-year fixed contract rate continues to coast stubbornly along north of 6%, lending support to the argument that the fault may not lie entirely in the snow.

(Stephen Culp)

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