371,000 people filed jobless claims last week, in line with the consensus of 370,000 and the 365,000 figure for the prior week. While the higher number will disappoint V-shaped recovery enthusiasts, it at least suggests that deterioration in the labour market has yet to accelerate.
Manufacturing in New York, however, unexpectedly plunged. The New York Fed’s general economic index dropped to -3.2, lower than the 0.0 consensus and well below the 0.6 figure for the previous month. Bloomberg:
Manufacturers are hesitant to ramp up production as the persistent housing slump, reduced access to credit and job cuts hurt consumer spending. Other nationwide reports signal that soaring costs for energy and raw materials are also limiting business activity, and only exports are preventing a collapse.
“The manufacturing sector is soft,” Michael Moran, chief economist at Daiwa Securities America Inc. in New York, said before the report. “I suspect it could get a little bit weaker in coming months but not much. In general, exports are helping to support manufacturing activity in the U.S.”
On a positive note, the report also revealed that outlook for the next 6 months actually increased, from 19.6 in April to 23.9.
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