US Jobless Claims Decline; Philly Fed Notes Mixed Manufacturing

James Hyerczyk
Updated: Mar 21, 2024, 14:02 GMT+00:00

Key Points:

  • US initial jobless claims slightly decrease, indicating labor market stability.
  • Philly Fed survey: Manufacturing shows tempered growth, employment challenges persist.
  • Future activity optimism rises, with expectations for manufacturing sector growth.
Initial jobless claims

Initial Jobless Claims Show Slight Decrease

The US labor market displayed resilience with a modest decline in initial jobless claims for the week ending March 16, as reported by the Department of Labor. The latest figure stands at 210,000, a slight drop of 2,000 from the previous week’s revised figure. However, the 4-week moving average, a more stable measure, exhibited a slight uptick to 211,250. The insured unemployment rate maintained its stability at 1.2% with a marginal rise in the number of unemployed individuals.

Philly Fed Survey Highlights Mixed Sentiments

The Federal Reserve Bank of Philadelphia released its business outlook survey, revealing mixed sentiments among manufacturers. The diffusion index for current general activity modestly declined to 3.2, suggesting a tempered pace of growth. Notably, the new orders index shifted to a positive 5.4, indicating a revival in demand, while the employment index remained in negative territory, reflecting continued challenges in workforce growth.

Price Pressures Easing

The survey also indicated easing price pressures, with the prices paid index dropping to its lowest since May 2020. This reduction suggests a gradual normalization in input costs, providing a potential relief for businesses grappling with inflationary challenges.

Optimism in Future Business Activity

Encouragingly, future indicators within the survey signal a more optimistic outlook. The diffusion index for future general activity surged to 38.6, its highest since July 2021. This reflects growing confidence among firms about an uptick in activity over the next six months, supported by strong rises in future new orders and shipments indices.

Market Forecast

Considering these observations, the market outlook appears cautiously optimistic. The easing of price pressures, combined with the revival in new orders and a stable job market, sets a foundation for moderate growth. However, the lingering concerns over employment and capacity utilization warrant attention. In the short term, these factors could foster a bullish sentiment, with cautious monitoring of the labor and manufacturing sectors being pivotal.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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