US Weekly Jobless Claims Post Surprise Drop

Key Takeaways

• Initial claims for unemployment benefits decreased by 20,000 to 192,000 for the week ending March 11, with a 4-week moving average of 196,500.
• US single-family homebuilding increased by 1.1% to a seasonally adjusted annual rate of 830,000 units in February, with an overall rise of 9.8% in housing starts to 1.450 million units.
• Building permits increased by 13.8% to a rate of 1.524 million units in February, with a significant rise of 24.3% in permits for housing projects with five units or more.
• The Philadelphia Federal Reserve’s manufacturing business outlook for March came in below expectations, rising to -23.2 from February’s reading of -24.3.

Overview

In the latest economic news, weekly first-time unemployment claims fell to 192,000, beating expectations of a decrease to 205,000, and significantly lower than the previous week’s 211,000.

Meanwhile, the Commerce Department reported that housing starts rose more than expected to 1.450 million in February, up from January’s 1.309 million.

Housing permits, which are a measure of upcoming construction activity, also increased more than anticipated to 1.524 million in February, up from January’s 1.339 million.

However, the Philadelphia Federal Reserve’s Manufacturing Index remained in contraction with a reading of -23.2, slightly up from February’s -24.3.

U.S. Weekly Unemployment Claims Drop to 192,000, 4-Week Moving Average Falls to 196,500

During the week that ended on March 11, seasonally adjusted initial claims for unemployment benefits totaled 192,000. This represents a decrease of 20,000 from the previous week’s revised level, which was revised up to 212,000, an increase of 1,000 from the original reported level.

The 4-week moving average for initial claims decreased by 750 to 196,500 from the previous week’s revised average of 197,250, which was revised up by 250.

The advance seasonally adjusted insured unemployment rate remained unchanged at 1.2 percent for the week ending on March 4, the same as the previous week’s unrevised rate.

Single-family homebuilding increased 1.1% to an annual rate of 830,000 units in February.

US single-family homebuilding and permits for future construction increased in February, offering hope that the housing market was stabilizing after being hit by higher mortgage rates.

Single-family homebuilding increased 1.1% to a seasonally adjusted annual rate of 830,000 units, with an increase in the Northeast and West but a decrease in the South and Midwest.

Overall housing starts rose 9.8% to a rate of 1.450 million units, the highest since September.

Building permits increased 13.8% to a rate of 1.524 million units, with a 24.3% increase in permits for housing projects with five units or more.

The housing market has been affected by the Federal Reserve’s aggressive interest rate hiking cycle, but the worst of the downturn could be over.

Philadelphia Fed’s Manufacturing Business Outlook for March Disappoints

The Philadelphia Federal Reserve’s manufacturing business outlook for March came in below expectations, rising to -23.2 from February’s reading of -24.3. Economists had predicted an improvement to -14.7.

The report noted that the indicators for general activity, new orders, and shipments were negative, with firms reporting a decline in employment.

Activity in the region remains at its lowest level since early 2020 due to the COVID-19 pandemic.

The report showed broad-based weakness in the mid-Atlantic’s manufacturing sector, with the New Orders Index dropping to -28.2 and the Shipments Index falling to -25.4.

The labor market also saw significant weakness, with the Number of Employees Index falling to -10.3. However, the weak activity is helping to cool down inflation, with the Prices Paid Index falling to 23.5.