Dollar ~flat; US crude up ~2%; bitcoin up ~3.5%; gold dips
US 10-year Treasury yield rises to ~4.69%
Jobless claims, Philly Fed and leading economic index
Things come in threes, they say, and Thursday's economic reports were no exception.
Starting with jobless claims, 206,000 U.S. workers joined the line outside the unemployment office USJOB=ECI last week, marking a 2.8% weekly decrease and falling 4,000 shy of consensus.
Still, ironing out weekly volatility, the four-week moving average shows a slight upward bias.
While fresh claims have essentially been bouncing near multi-decade lows for months, July's jobs data—with its surprise loss, sharp downward revisions, and lower participation rate—and recent JOLTS numbers continue to support the notion that the labor market remains in low-hire/low-fire mode amid economic and geopolitical uncertainties.
"Demand for workers remains soft, but the supply of workers has slowed even more – leaving the labor market roughly in balance," writes Matthew Martin, senior U.S. economist at Oxford Economics.
On the other hand, ongoing jobless claims USJOBN=ECI, reported on a one-week lag, increased by 1.0% to 1.799 million, 9,000 more than analysts expected.
Souring job confidence and a low quit rate suggests that, despite the overall downward trend in continuing claims, workers feel far from secure. Perhaps it's difficulty in finding new jobs, benefit expiration or the dropping labor market participation; whatever the case, the labor market seems to be in a low-churn, but stable state.
"Breakeven job growth should keep continued claims in check and be reflected in a stable unemployment rate," Martin adds. "This will leave the Federal Reserve focused on the inflation side of their mandate."
Moving to manufacturing, the Philly Fed business index USPFDB=ECI accelerated unexpectedly this month, gaining six points to print at 47.4, surprising economists, who predicted a move in the opposite direction to 25.0.
"Current new orders and shipments indexes both declined but remained above their long-run nonrecession averages," the press release says.
The employment component rose to its highest level since April 2022, while input prices and prices received both declined.
The acceleration echoed the Empire State's August report released on Monday, suggesting manufacturing activity in the Atlantic region is picking up steam.
Positive Philly Fed/Empire State numbers indicate monthly growth, while negative readings signify contraction.
In another bit of good news, the Conference Board's (CB) Leading Economic Index (LEI) USLEAD=ECI showed stronger-than-expected strength in July, rising 0.2% versus the 0.1% consensus and reversing June's 0.1% drop.
The index is an amalgamation of 10 forward-looking economic indicators, including initial jobless claims, ISM new orders, building permits, yield spreads and S&P 500 price performance.
"Most components were positive in July except consumer expectations, which continued to be a notable drag on the overall index," writes Justyna Zabinska-La Monica, CB's senior manager of Business Cycle Indicators. "With the most recent gains, the LEI’s six-month growth rate turned positive for the first time in more than four years, suggesting moderate growth ahead.”
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