- Continuing Claims rose to 2480K last week versus estimates of 2460K and 2469K prior.
- Factory Orders for June rose 1.2% versus estimates of a 1.8% gain and a 1.0% rise in May.
- ISM Non-Manufacturing for July rose to 54.8 versus estimates of 56.8 and a reading of 57.0 in June.
BOTTOM LINE: The number of US workers filing first-time applications for state jobless benefits rose last week while remaining at a level reflecting a tight labor market, Bloomberg said. The four-week moving average was almost unchanged at 313,750. The unemployment rate among those eligible to collect benefits, which tracks the US unemployment rate, remained at 1.9%. I continue to believe the labor market will remain healthy without generating substantial unit labor cost increases over the intermediate-term.
Orders placed with US factories rose for a second straight month in June, pointing to production gains that will buffer the economy, Bloomberg reported. June factory orders were limited by a fall of .7% in demand for petroleum products, chemicals and paper versus a 1.9% rise the prior month. Orders for capital goods excluding aircraft and defense, a gauge of future business spending, rose .4% versus a 1.3% rise the prior month. The inventory-to-shipments ratio rose to 1.16 months versus a record low of 1.15 months in May. I continue to expect manufacturing to decelerate, but remain healthy as companies rebuild depleted inventories.
Service industries in the US expanded at a slower pace in July as orders dropped to the lowest in more than three years, Bloomberg reported. The new orders component of the index fell to 55.6 versus 56.6 the prior month. The prices paid component of the index rose slightly to 74.8 from 73.9 the prior month. The employment component of the index rose to 54.5 from 52 the prior month. I expect consumer spending to remain around long-term average levels through year-end. However, the back-to-school selling season will likely exceed muted expectations.
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