Labor Market Still Healthy, Leading Indicators Rise Slightly, Philly Manufacturing Slows

- Initial Jobless Claims for last week fell to 304K versus 320K the prior week.
- Continuing Claims rose to 2505K versus estimates of 2425K and 2420K prior.
- Leading Indicators for June rose .1% versus estimates of a .2% increase and a .6% decline in May.
- The Philly Fed Index for July fell to 6.0 versus estimates of 12.0 and a reading of 13.1 in June.

BOTTOM LINE: The number of US workers filing first-time applications for state jobless benefits fell last week as auto workers finished submitting claims following annual shutdowns at some plants, Bloomberg said. The insured unemployment rate, which tracks the US unemployment rate, remained at 1.9%. The four-week moving-average of claims rose to 316,750. I continue to believe the labor market will remain healthy over the intermediate-term without generating substantial unit labor cost increases.

An index of leading economic indicators rose less than expected in June, Bloomberg said. I continue to expect US economic growth to slow to around average levels through year-end. This will be viewed as a positive over the coming months.

Manufacturing growth in the Philly area decelerated this month, Bloomberg said. The employment component rose to 12.8 versus a reading of 6.8 in June. The outlook component of the index rose to 15.4 versus 6.8 the prior month. The prices paid component of the index rose to 50.3 versus 48.7 in June. I expect manufacturing is still in the process of slowing to more average levels. Low inventories should cushion the deceleration.