Is good news still bad? Jobless claims, layoffs, PMI and construction spending
TLT•U.S. data showed low jobless claims, expanding factory activity and a 0.9% monthly rise in August construction spending, adding evidence of economic resilience. U.S. stocks were lower and the 10-year Treasury yield edged up to about 5.30%.
1. Labor market signals
Initial jobless claims fell to 197,000 last week, 1,000 below the prior week and 3,000 below analyst expectations. U.S. firms announced 43,281 layoffs in September, down 18% from August and 20% from a year earlier; continuing claims fell 0.6% to 1.701 million, their lowest reading in almost three years.
2. Factory activity expands
The ISM manufacturing PMI slipped 0.1 point to 54.5 in September, its ninth consecutive month above 50. Its prices-paid measure rose 6.8 points to 77.9, the highest since May. S&P Global’s final manufacturing PMI was 55.9, below its initial 57.0 reading but two points above August’s final result.
3. Construction and markets
Construction spending rose 0.9% in August, versus economists’ expectations for no change. Private spending increased 1.1% for the month, while government spending rose 0.2%. The article said the economic data offered a rationale for the Federal Reserve to keep raising rates for now; the Nasdaq and S&P 500 were modestly lower, the Dow was down about 0.7%, and the 10-year Treasury yield edged up to about 5.30%.
