Initial Jobless Claims Fall Slightly, Philly Fed Below Estimates, Leading Indicators Register Back-to-Back Gains

- Initial Jobless Claims for this week fell to 381K versus estimates of 375K and 386K the prior week.

- Continuing Claims fell to 3060K versus estimates of 3135K and 3136K prior.

- Philly Fed for June fell to -17.1 versus estimates of -10.0 and a reading of -15.6 in May.

- Leading Indicators for May rose .1% versus estimates of unch. and a .1% gain in April.

BOTTOM LINE: The number of Americans filing first-time claims for unemployment benefits fell last week, Bloomberg reported. The four-week moving average of jobless claims rose to 375,250 from 372,000 the prior week. During the very mild recession of 2001, weekly jobless claims averaged 415,000. The unemployment rate among those eligible for benefits, which tracks the US I still expect jobless claims to trend modestly lower over the intermediate-term. unemployment rate, fell to 2.3% from 2.4% the prior week.

A Philadelphia-area report showed manufacturing contracted in June slightly more than the prior month, Bloomberg reported. The New Orders component fell to -12.4 from -3.7 the prior month. The Prices Paid component rose to 69.3 from 53.8 in May. The Prices Received component fell to 29.7 from 31.6 the prior month. The Outlook, for the next 6 months, component fell to 21.3 from 28.2 the prior month. I expect this gauge to improve meaningfully next month on inventory rebuilding and an increase in demand.

The index of leading US economic indicators unexpectedly rose in May for a second straight month, a sign that growth may slow without stalling, Bloomberg said. This was the first back-to-back monthly increase in a year and a half. New orders for consumer goods and bookings for capital equipment each added .01 percentage point to the index. Money supply adjusted for inflation, which has the biggest weighting in the index, subtracted .14 percentage point. Confidence also was a drag, taking away .06 point from the index. I still expect US 2Q GDP growth to exceed economists’ estimates of a .5% gain. Growth should continue to improve modestly in the second half, as well.