Unemployment Claims
For the week ending June 22, seasonally adjusted initial unemployment claims fell to 233,000, 3,000 below market expectations of 236,000, and 6,000 below the previous week’s revised level of 239,000. Despite this decrease, the 4-week moving average rose to 236,000, up by 3,000 from the previous week’s revised average, indicating a gradual increase in jobless claims. The insured unemployment rate remained stable at 1.2%, but the number of insured unemployed rose by 18,000 to 1.839 million, the highest level since November 2021. This increase points to underlying weaknesses in the labor market. Given the rising 4-week moving average and the increase in insured unemployment, the outlook for the labor market is bearish, signaling potential challenges in employment stability.
Durable Goods Orders
In May 2024, new orders for manufactured durable goods rose by 0.1%, or $0.3 billion, to $283.1 billion, marking the fourth consecutive month of growth. However, excluding transportation, orders decreased by 0.1%, and excluding defense, they dropped by 0.2%. Transportation equipment, up three of the last four months, drove the overall increase with a 0.6% rise to $95.4 billion.
This sector’s performance offset declines in other areas, underscoring its critical role in driving durable goods growth. The report is seen as positive, surpassing expectations and indicating sustained demand in key sectors.
The consistent rise in durable goods orders, especially in transportation equipment, suggests ongoing industrial demand and economic resilience in manufacturing. The outlook is bullish, with the continued increase in orders signaling strength in manufacturing and potential for sustained economic growth.
Conclusion
The mixed economic data from Q1 2024 reflects both strengths and weaknesses. While GDP growth has slowed, and unemployment claims indicate potential labor market challenges, the steady rise in durable goods orders suggests resilience in manufacturing. Traders should remain cautious but watchful for opportunities, particularly in the durable goods sector.