Initial jobless claims totaled 245k, 5k more than expected and up from 240k last week. The 4 week average was unchanged at 240k and just off the highest since last November. Of particular note was the jump in continuing claims to 1.865mm, higher by 60k w/o/w and reflecting an evident slowdown in the pace of hiring. That’s the most since November 2022.
Bottom line, in terms of trajectory, there is definitely some softening going on here with the labor market.
Continuing Claims
The NY manufacturing index upside surprise a few days ago was a head fake as the Philly Fed said its regional index fell to -31.3, its 8th month in a row below zero. Go back to the depths of March 2009, not including Covid, the last time you saw manufacturing reads like this. Shipments, new orders, backlogs, inventories, employment and the workweek were all negative. Supplier deliveries were as well and prices paid and those received declined again with the latter falling below zero.
Also of note, the 6 month outlook was less than zero for the 2nd straight month at -1.5 and this compares with -1.8 in the 6 month average. Capital spending plans were negative too and follows the expectations of what CDW said in their earnings release yesterday with regards to IT spending in 2023.
Bottom line, with two regional manufacturing surveys being seen with each moving in opposite directions, though NY’s 6 month outlook was muted too, the other regional surveys take on greater importance in the weeks to come. We do get the S&P Global national number tomorrow for some guidance. A below 50 print again is anticipated.
Philly Mfr’g
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