August 19, 2022: -On Thursday, the Labor Department reported that initial filings for unemployment benefits were refused in the previous week. However, they were consistent with a drift higher in layoffs that started in the spring.
Jobless claims totaled 250,000 for August 13, down 2,000 from the previous week and less than the 260,000 Dow Jones estimate.
The four-week moving average for claims, helping smooth out weekly volatility, also fell by 2,750 to 246,750.
Earlier this year claims reached their lowest level in over 50 years but began increasing in April after bottoming at 166,000. The four-week moving average has increased during that time by nearly 80,000.
Continuing claims, running a week behind the headline number, totaled 1.437 million, an increase of 7,000.
Policymakers watch the jobs market closely when inflation is reaching 40-year highs. Federal Reserve officials have instituted a series of interest rate increases to cool a labor market in which nearly two jobs are open for every available worker.
On Wednesday, at their July meeting, Fed officials noted “tentative signs of a softening outlook for the labor market” that had a climb in weekly claims, according to minutes released. Policymakers said they were determined to resume increasing interest rates until inflation was under control, even if it meant more of a deceleration in recruiting.
“Unfortunately, what’s good for the American worker is bad for the Fed’s attempt to bring inflation back down to 2%, and this will complicate their job and cause them to increase rates higher and for longer than many people currently expect,” said Chris Zaccarelli, chief investment officer for Independent Investor Alliance.
On Thursday’s economic news, the Philadelphia Fed reported that its monthly manufacturing survey for August surged to a reading of 6.2, representing the percentage difference between companies expecting expansion vs. contraction. That was an improvement over July’s minus-12.3.
The level exceeded the estimate for a minus-5 and helped quell fears that manufacturing might be headed for a significant slowdown. A similar survey on Monday from the New York Fed decreased a stunning 40 points as respondents indicated that business conditions were deteriorating.
The indices for prices paid and received reduced in the month, though they remain well into territory that indicates inflation is still current. Hiring also enhanced, as did further orders, though the latter still registered a reading of minus-5.1.
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