Initial jobless claims totaled 860k, 10k more than expected but down from 893k last week (revised from 884k). Continuing claims, delayed by a week in its reporting, fell to 12.6mm from 13.5mm last week as we have another week without the extra $600 of benefits which hopefully is encouraging people to take one of the 6mm+ jobs that are available as seen in the July JOLTS data. Those receiving PUA fell to 658k from 868k in the week prior, also hopefully helped by the reduced incentive to collect benefits. Bottom line, still a ways to go to recapture what was lost. The talk in DC is that if there is a deal, an added $450 in benefits will be added, a rate of change decline from $600 but generous enough for some to result in some decision making on whether to go back to work.
INITIAL JOBLESS CLAIMS
CONTINUING CLAIMS
The September Philly manufacturing index fell slightly to 15 from 17.2 in August but that was as expected. I still think manufacturing is being boosted by both the reopening and the need to replenish inventories. To this, inventories fell by 9 pts to -10.8 and thus new orders rose 6.5 pts to 25.5 and backlogs got back above zero at .4. Delivery times also got extended but could be due to capacity constraints as we’re seeing spikes in trucking and shipping costs. Employment rose 6.7 pts but after dropping by 11 pts last month. The workweek moderated. On the price pressures, Prices Paid jumped almost 10 pts to the highest level since September 2019 and those received were 6 pts higher to 18.4, the most also since September 2019.
The 6 month business outlook improved to 56.6 from 38.8 and that gets it back above the 6 month average of 48.4. There also was a large jump in expectations for both prices paid and received, 20 pts for the former and 12.2 pts for the former. Capital spending plans rose 8 pts. To my point of the need to rebuild inventories, expectations for inventories rose 5.3 pts to a 5 month high.
PHILLY MFR’G
PHILLY PRICES PAID 6 month expectation
Housing starts in August totaled 1.42mm, about 70k less than expected and down from 1.49mm in July. The decline though was all in multi family as starts here fell by 116k m/o/m after jumping by 137k in July. Single family starts however rose above 1mm for the 1st time since February at 1.02mm from 981k in July. With respect to permits, the story was the same with a rise in single family, also above 1mm and a drop in multi family after a July jump.
Bottom line, the single family data, along with the NAHB figure seen yesterday, continues to point to housing as a key bright spot of the economy but something we already know. Multi family just gave back the July jump.
SINGLE FAMILY STARTS