Jobless Claims Decline to Lowest Level Since 1969
S E E D E D C O N T E N T
The number of Americans filing for unemployment benefits dropped to a more than 48-1/2-year low last week as the labor market strengthens further, but trade tensions are casting a shadow over the economy’s outlook.
Other data on Thursday showed manufacturing activity in the mid-Atlantic region accelerated in July amid a surge in orders received by factories. But the Philadelphia Federal Reserve survey also showed manufacturers paying more for inputs and less upbeat about business conditions over the next six months.
Fewer manufacturers planned to increase capital spending, suggesting trade tensions, marked by tit-for-tat import tariffs between the United States and its trade partners, including China, Canada, Mexico and the European Union, could be starting to hurt business sentiment.
The survey came on the heels of the Federal Reserve’s Beige Book report on Wednesday, showing manufacturers in all districts worried about the tariffs and reporting higher prices and supply disruptions, which they blamed on the new trade policies.
“Yesterday’s Beige Book and the recent decline in the investment intentions balance in the Philly Fed survey show that escalating trade tensions are starting to have a material impact on companies’ confidence about the future,” said Brian Coulton, chief economist at ratings agency Fitch.
Initial claims for state unemployment benefits dropped 8,000 to a seasonally adjusted 207,000 for the week ended July 14, the lowest reading since early December 1969, the Labor Department said. Economists polled by Reuters had forecast claims rising to 220,000 in the latest week.
The second straight weekly decline in claims, however, likely reflects difficulties adjusting the data for seasonal fluctuations around this time of the year when motor vehicle manufacturers shut assembly lines for annual retooling.
The four-week moving average of initial claims, considered a better measure of labor market trends as it irons out week-to-week volatility, fell 2,750 to 220,500 last week.
The dollar firmed against a basket of currencies. Stocks on Wall Street were lower, while prices for U.S. Treasuries rose.
WORKER SHORTAGE
The claims data covered the survey week for the nonfarm payrolls component of July’s employment report. The four-week average of claims dipped 500 between the June and July survey periods, suggesting solid job growth this month.
The economy created 213,000 jobs in June, with the unemployment rate rising two-tenths of a percentage point to 4.0 percent as more Americans entered the labor force, in a sign of confidence in their job prospects.
Federal Reserve Chairman Jerome Powell told lawmakers this week that with appropriate monetary policy, the job market will remain strong “over the next several years.”
The labor market is viewed as being near or at full employment. There were 6.6 million unfilled jobs in May, an indication that companies cannot find qualified workers.
That was reinforced by the Beige Book, which showed worker shortages persisting in early July across a wide range of occupations, including highly skilled engineers, specialized construction and manufacturing workers, information technology professionals and truck drivers.
Thursday’s survey from the Philadelphia Fed showed its business conditions index jumped to a reading of 25.7 in July from 19.9 in June. The survey’s measure of new orders increased to 31.4 from a reading of 17.9 in June.
But its gauge of factory employment fell as did the average workweek. Manufacturers also continued to report higher prices for both purchased inputs and their own manufactured goods. The survey’s prices paid index soared to 62.9 this month, the highest level since June 2008, from 51.8 in June.
The index has risen 30 points since January. Sixty-three percent of manufacturers in the region reported paying more for inputs this month compared with 54 percent in June.
The price increases are likely related to tariffs on steel and aluminum imports, which were imposed by the Trump administration to protect domestic industries from what it says is unfair foreign competition.
Wednesday’s Beige Book mentioned a machinery manufacturer in the Philadelphia area who described the effects of the steel tariffs as “chaotic to its supply chain, disrupting planned orders, increasing prices, and prompting some panic buying.”
The Philadelphia survey’s index for future activity decreased for the fourth straight month. Capital spending plans over the next six months also fell as did intentions to hire more factory workers.
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American jobless claims have dropped to a historic low thanks to President Trump’s booming “America First” economy.
The number of Americans claiming unemployment has now dropped to the lowest level as of last week since December 1969, the Bureau of Labor Statistics reports. Jobless claims decreased by 8,000 to 207,000 as of July 14.
This translates to the shortest unemployment lines in the United States since 1969. Trump’s tight labor market economy has secured higher wages for a number of blue collar sectors for American workers as employers and businesses compete for employees.
As Breitbart News reported, job growth for native-born Americans has remained steady over the last couple of months. Meanwhile, as illegal immigration falls, job growth for foreign-born workers has begun to drop, welcome news for native workers who will face less competition for employment.
In Trump’s tightened labor market, there has been history-making wage growth for American workers in the construction industry, the garment industry, for workers employed at small businesses, black Americans, and restaurant workers. Most recently, older retirees have also re-entered the workforce for high-paying jobs.
The tight labor market has also secured higher wages for overtime workers and high-paying , coveted white-collar jobs for America teenagers.
Thanks Obama!
Now lets just hope that Trumps trade wars and historically large budget deficits , caused by his ill advised tax cut, don't screw us too badly before his time in office becomes just another footnote in history.
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Actually the trade war could be just the break the economy needed. It created uncertainty which prevented a stock market bubble of irrational exuberance and it created just enough uncertainty to moderate the rate of increase in the Fed’s interest rate benchmark.
Obama deserves none of the credit for the low unemployment levels, the tax cuts, the less regulatory environment, the 4% GDP growth or the wage increases.
Huh?
Obama had the longest stretch of adding job in American history...75 months. When trump has that? Then you can brag. Also, Obama more than cut the UE rate in half. Trump? Has lowered the UE rate less than 1% since taking office. Again, when he cuts the UE rate in half? Get back to us.
Tariffs, tax cuts and increased spending? All spell disaster for the US economy. Deal with it.
Obama had 85 billion a month in stimulus via the fed during most all of his presidency. Trumps growth is happening without such and in the face of rising interest rates.
Trump deserves all the credit for everything. Never, in the history of America, or the World for that matter, has a nation been blessed by a leader chosen by gawd who is most definitely the epitome of 'the stable genius.'
Obama did nothing. The economic recovery was spurned by Dick Cheney's last days in office. This is proven fact. InfoWars has the evidence.
All those positive numbers are good, but what about the flip side of the coin? Companies are relocating overseas, companies that he promised job security to the workers lost their jobs (Carrier), and telling coal miners that he would bring their jobs back.
And companies weren't relocating overseas under Obama? Just to name one giant that had a Jobs Czar in the Obama administration GE- moved jobs and production overseas while taking in tax credits to do so during Obama's term in office.
Guess that worked out well for GE.
Welcome to the world economy- where whatever country can offer the lowest taxes, regulations, and highest incentives and market for goods gets the jobs.
The US, even with the corporate tax cuts Trump and the Republicans passed and loosening of regulations, can still not compete.
There has been a lot of insourcing since Trump became president of companies that had previously outsourced and were now returning. Due to cheaper abundant natural gas, fewer regulations, tax cuts. They are largely returning to right to work States even if they didn’t leave from one in the 1st place.