WASHINGTON: The number of Americans filing applications for unemployment benefits increased moderately last week, pointing to still strong labour market conditions despite signs that economic activity was slowing.
Other data on Thursday showed factory activity in the mid-Atlantic region rebounded sharply in July, reaching its highest level in a year. That added to recent surveys on manufacturing that have suggested the struggling sector was stabilising.
The improvement in the regional factory surveys likely reflects a decision by President Donald Trump not to impose tariffs on Mexican goods after the two countries struck a deal on immigration. But manufacturing, which makes up about 12 percent of the economy, remains hamstrung by weaker business spending on equipment, an inventory glut, a bitter trade war between the United States and China, and softening global growth.
“This big swing in the data over the past couple of months may reflect changing attitudes on trade given that the sampling for the June reports probably occurred around the time of peak concern about trade policy between the US and Mexico,” said Daniel Silver, an economist at JPMorgan in New York.
Initial claims for state unemployment benefits rose 8,000 to a seasonally adjusted 216,000 for the week ended July 13, the Labour Department said, remaining in the middle of their 193,000-230,000 range for this year. Last week’s increase in claims was in line with economists’ expectations.
The claims data tends to be volatile around this time of the year because of summer factory closures, especially in the automobile industry, which occur at different periods. This can throw off the model the government uses to strip out seasonal fluctuations from the data.
Layoffs remain low despite the US-China trade tensions, which have contributed to a dimming of the economy’s outlook and led the Federal Reserve to signal it would cut interest rates at its July 30-31 meeting for the first time in a decade. – Reuters
