Everything That’s Knowable

360,000 Americans filed for unemployment benefits last week, slightly more than expected. The prior week was revised higher.

The market was looking for 350,000. The range, from 40 economists, was 325,000 to 375,000.

We’re now three weeks removed from a disconcerting uptick (readily observable in the figure, below) that had some market participants concerned. It’s probably safe to call that anomalous at this point.

The four-week moving average fell to 382,500. Headline initial claims are now the lowest since March 14, 2020.

Ongoing claims were 3.241 million, less than the 3.3 million consensus expected. Pandemic Unemployment Assistance claims fell. Ongoing PUA and PEUC claims were 5,687,188 and 4,710,359, respectively. So, the big picture remains generally unchanged. There are still some 13.7 million people receiving assistance.

At this point, there’s not much left to say on the jobless benefits front. It’s a waiting game. Those who haven’t yet read “The Big Benefits Question,” are encouraged to do so.

Meanwhile, Empire manufacturing was a rather large beat. The headline gauge jumped 26 points to 43. Consensus was looking for 18. The prices paid gauge ticked lower, but remained extremely elevated at 76.8.

The accompanying color painted a familiar picture. “New orders and shipments increased robustly, delivery times continued to lengthen substantially [and] input prices continued to increase sharply,” the survey said. Selling prices increased at the quickest pace ever (figure below).

Employment growth was described as “strong.” The average workweek increased. Bottom line: Business activity is apparently expanding at a record-setting pace in New York state.

The Philly gauge, on the other hand, missed on the headline, falling to 21.9 from 30.7. “Firms continued to add to their payrolls this month,” the survey said. More than 38% of respondents reported increases in employment. Just 9% reported decreases.

Although both price indexes fell (figure below) price pressures are still the story. 72% of the firms reported higher input prices in July. Just 2% said their input prices were lower.

The prices received index fell 3 points, but at 46.8, it remains at the highest levels in decades.

All in all, Thursday’s data does little (if anything) to change the narrative. The world’s largest economy is running hot, price pressures are pervasive and the labor market is still lagging as the recovery rolls on.

Retail sales (which beat handily for June) may help refine the story, but I doubt it. Chances are, everything that’s knowable about the state of the economy is known for the time being.