In the week ended July 4, initial claims dropped to the lowest level since January. Last week, initial claims dropped by 52 000, from an upwardly revised 617 000 to 565 000, while an outcome of 603 000 was forecasted. Labour officials said that the larger-than-expected decline was largely due to “deflection from expectations” in the seasonal factors. Many states reported that automotive layoffs typically occurring during this period have already occurred or haven’t materialized to the degree expected, but also the shortened week might have distorted figures. Continuing claims, which are reported with a one-week lag, surprised on the upside of expectations. In the week ended June 27, continuing claims rose by 159 000 from an upwardly revised 6 724 000 to 6 883 000, significantly above the consensus estimate of 6 710 000.
US wholesale inventories dropped for the ninth consecutive month in May. On a monthly basis, wholesale inventories dropped by 0.8% M/M, while a slightly steeper contraction was forecasted. The previous figure was upwardly revised from -1.4% M/M to -1.3% M/M. Sales rose by 0.2% M/M in May, resulting in inventory/sales ratio of 1.29 (from 1.31).
Other: UK trade dificit at lowest level in three years
In the UK, the trade deficit narrowed more than expected in May, to its lowest level since June 2006. The visible trade deficit narrowed from a revised £7137 to £6263, while the consensus was looking for a deficit of £6750. The details show that total exports of goods dropped by 2.5%M/M, while imports fell a more rapid 4.0% M/M. The underlying picture remains fragile as the improvement is coming from a contraction in imports, rather than stronger exports.
