Initial jobless claims climbed, despite projections of a continued slow decline, while the Empire State Manufacturing report also signalled a slowing economy, but the Federal Reserve Bank of Philadelphia’s manufacturing index rose.
“The headline indexes in key regional manufacturing sentiment surveys were mixed in October, but the improvement in the surveys’ underlying details on current conditions and demand suggest that manufacturing activity continues to rebound solidly as businesses rebuild inventories,” according to Roiana Reid, U.S. economist at Berenberg Capital Markets.
Claims increased to a seasonally adjusted 898,000 in the week ended Oct. 10, from the previous week’s upwardly revised level of 845,000, originally reported as 840,000, the Labor Department said Thursday.
Economists polled by IFR Markets projected 830,000 claims in the week.
Continuing claims fell to 10.018 million in the week ended Oct. 3, from an upwardly revised level of 11.183 million a week earlier, first reported as 10.976 million.
The states with the largest rise in claims in the week ended Oct. 3 were: Florida (9,933), Illinois (6,877), Massachusetts (4,021), North Carolina (2,907), and Maryland (1,714), while the states with the biggest drops were: New Jersey (3,504), Kansas (3,312), Pennsylvania (3,111), Louisiana (2,835), and Washington (2,474).
According to Ed Moya, senior market analyst at OANDA , weekly jobless claims continue to “paint a very ugly picture of the U.S. economy.”
Topping estimates this week and the upward revision to last week’s number, shows “the number of Americans filing new claims remains four times the pre-pandemic level and is ringing alarms that permanent damage to the labor market is happening,” he said. “With California data still being locked, it is unsure how much worse the numbers could be.”
“Some 30 weeks since the pandemic-caused downturn began, we see a disappointing increase in the number of new seasonally adjusted claims in the traditional programs administered by states at just under 900,000,” said Mark Hamrick, senior economic analyst for Bankrate. “The sobering reality is that it appears further help may not be coming from elected officials in Washington in and that COVID-19 cases remain shockingly high.”
In the coming months a “risk of stagnation” exists, he said, as businesses “struggle,” or go belly up, leading to more employees losing their jobs.
“Federal Reserve officials don’t expect to see so-called full employment again until 2023,” Hamrick said. “Beneath the surface, a K-shaped recovery has very much come into view, as the striking separation of the haves and have-nots has dramatically unfolded. The fissure largely reflects the ability of some service sector employees to work from home, while others who cannot do that suffering either a loss of employment, or income, or both.”
Empire State manufacturing
Manufacturing activity “expanded modestly” in the New York region, the October Empire State manufacturing survey, released by the Federal Reserve Bank of New York indicated.
The current general business conditions index fell to 10.5 in October from 17.0 in September.
Economists expected a reading of 15.0.
The new orders index climbed to 12.3 from 7.1, while the shipments index grew to 17.8 from 14.1 and unfilled orders narrowed to negative 6.6 from negative 9.4, the Fed said.
The delivery time index dropped to 2.0 from 5.0, while the inventories index widened to negative 14.6 from negative 3.6 in the prior survey. The prices paid index climbed to 27.8 from 25.2, while the prices received index slipped to 5.3 from 6.5. The number of employees index increased to 7.2 from 2.6 and the average employee workweek index jumped to 16.1 from 6.7, the Fed said.
In the forward looking indexes, the general business conditions index declined to 32.8 from 40.3. The new orders index slipped to 37.7 from 39.1, while the shipments index fell to 29.8 from 39.0 from 30.8, and unfilled orders narrowed to negative 2.0 from negative 3.6 the Fed said. The delivery time index gained to negative 4.0 from negative 5.8, while the inventories index rose to 2.6 from 0.7.
Import prices rose 0.3% in September, following a 1.0% climb in August, the Labor Department reported Thursday.
Export prices gained 0.6% in September on the heels of a 0.5% jump the previous month.
Economists expected imports to creep up 0.3% and anticipated an increase of 0.4% for exports.
Philadelphia Fed manufacturing
The manufacturing sector in the Philadelphia region “picked up” in October, according to the Federal Reserve Bank of Philadelphia’s manufacturing Business Outlook Survey, released Thursday.
The general activity index soared to 32.3 from 15.0 last month.
Economists predicted a level of 15.0.
The new orders index rose to 42.6 from 25.5 the prior month. Shipments increased to 46.5 from 36.6 and unfilled orders climbed to 8.3 from 0.4.
The future general business activity index for the region jumped to 62.7 from 56.6.