Weekly Unemployment Claims Fall; Mixed Results in June Manufacturing Outlook

James Hyerczyk
Updated: Jun 20, 2024, 16:00 GMT+00:00

Key Points:

  • Unemployment claims drop to 238,000, reflecting a stronger labor market with fewer layoffs.
  • June manufacturing survey reveals weak employment but steady production and stable capacity utilization.
  • Price pressures rise in June as firms report higher input costs and increased prices for goods.
Initial jobless claims

Decrease in Weekly Unemployment Claims

The Department of Labor reported a decrease in initial unemployment claims for the week ending June 15. The seasonally adjusted figure dropped by 5,000 to 238,000 from the previous week’s revised level of 243,000. The four-week moving average rose by 5,500 to 232,750.

June 2024 Manufacturing Business Outlook Survey

The Philadelphia Federal Reserve’s Manufacturing Business Outlook Survey, conducted from June 10 to June 17, indicated mixed results for regional manufacturing activity.

Mixed Current Indicators

The general activity index fell to 1.3, its lowest since January. About 24% of firms reported increased activity, while 23% saw declines. The new orders index improved slightly but remained negative at -2.2. The shipments index dropped to -7.2. Employment remained weak, with the index at -2.5, indicating a continued decline despite a slight improvement.

Rising Prices

Price pressures increased, with the prices paid index rising to 22.5, and the prices received index climbing to 13.7. Nearly 26% of firms reported higher input prices, while 14% noted higher prices for their goods.

Production and Capacity Utilization

Half of the firms reported increased production for Q2 compared to Q1, while capacity utilization remained stable at 70-80%. Labor supply constraints eased slightly, but energy market concerns grew.

Future Expectations

Future activity indicators showed less optimism. The future general activity index fell to 13.8, and future new orders and shipments indexes declined significantly. Firms expect modest employment growth and rising price pressures over the next six months.

Market Forecast

The overall data suggests a mixed outlook. The decrease in unemployment claims points to a strengthening labor market, but persistent challenges in manufacturing and rising price pressures indicate caution. Therefore, the market outlook remains bearish in the short term.

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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