Initial jobless claims fell to 406k, 20k less than expected and down from 444k last week. This marks the 3rd straight week below 500k and brings the 4 week average to 459k from 505k. Those filing for initial PUA was little changed at 94k from 95k last week. Continuing claims, delayed by a week, fell by 96k after rising by 98k in the week prior. At 3.64mm it is where it was on May 1st. It will be in June where we’ll be able to gauge the impact of some states backing out of the extended benefits program. Delayed by two weeks, those continuing to receive PUA was down by 91k to the lowest since early January. Those still receiving emergency benefits rose by 49k.
Bottom line, it only makes sense that with 8.1mm job openings to see a continued fall in the pace of firing’s. Those still on claims though have essentially flat lined over the past few months but we’ll see in the coming months how much labor supply comes back as some states end the extended benefits. We know though that there are other issues here too with supply, that being remote learning, skills mismatches and baby boomers that will stay retired.
INITIAL CLAIMS
CONTINUING CLAIMS
Core durable goods orders in April rose 2.3% m/o/m, more than double the estimate of up 1% and March was revised up by 4 tenths to a 1.6% gain. Core shipments, plugged into GDP, was about as expected when we include the March revision.
The stress on the auto industry was apparent as orders fell by 6.2% m/o/m and was negative for the 3rd month in the past 4. I encourage you to drive by an auto dealership to see how bare the parking lot is. The supply shortage also resulted in a 2nd straight month of declines in electrical equipment. Orders for computers/electronics though did rise and we’ll see if there are enough semi’s to fill them all. Thanks to the commodity bull market, orders for machinery and metals all rose. The inventory to shipments ratio held at 1.78.
Bottom line, there is one to thing to place an order but another nowadays to get it shipped but the order trends in the data are basically following what we’re seeing. Coming out of this supply problem sometime next year hopefully will reveal how much double and triple ordering we’re seeing for just about everything.
$ amount of Core Durable Goods