In the week ended July 11, initial claims fell by 47 000 from an upwardly revised 569 000 to 522 000, while the consensus was looking for an outcome of 553 000. Also continuing claims surprised on the downside of expectations falling by 642 000 to a total number of 6 273 000, in the week ended July 4. The previous figure was upwardly revised from 6 883 000 to 6 915 000. The labour department added that far fewer layoffs than anticipated based on past experience in the automotive sector and elsewhere in manufacturing accounted for both the large drop in initial and continuing claims. As such, we would be careful to draw many conclusions out of these data.
In July, the Philadelphia Fed deteriorated somewhat after the impressive rebound in June. The headline index dropped from -2.2 to -7.5, while a more modest decline was forecasted. The breakdown shows that the deterioration was especially driven by a drop in shipments (-9.5 from 2.1), but also number of employees fell somewhat (-25.3 from -21.8). New orders (-2.2 from -4.8), unfilled orders (-14.6 from -19.6), delivery time (-10.3 from -18.9) and average workweek (-15.5 from -26.6) improved, while inventories stayed broadly unchanged. Prices paid rose significantly, while prices received fell somewhat. The deterioration is however no surprise after the significant improvement last month and also the details were not as weak as the headline figure.
