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US Initial Claims Fall, But Level Remains High

US initial jobless claims filings fell further in the current week, but the pace of weekly declines has slowed and the level itself remains extremely elevated.

In other data Thursday, manufacturing conditions in the Philadelphia Fed region improved drastically in June, showing growth for the first time since the COVID-19 crisis started.

The Labor Department reported that initial claims filings fell by 58,000 to a 1.508 million level in the current week, still above the 1.220 million level expected and following an upward revision to the previous week’s level to 1.566 million.

While the number of new weekly filings has declined in each of the last 11 weeks, the size of those declines has become progressively smaller and the level is still extremely high.

The total number of unadjusted new claims filed since the start of the COVID-related shutdowns climbed to 41.8 million, with some filings likely repeats if workers were rehired and then let go again. That will be more common if companies that rehired workers to receive government stimulus funds need to let them go again.

Unadjusted claims fell by 128,240 in the current week, with the state data showing the largest declines in Florida, Oklahoma and Maryland.

The Labor Department reported that 760,526 workers filed under Federal Pandemic Unemployment Assistance on an unadjusted basis, up from 66,063 in the previous week.

Continuing claims, those already receiving benefits, fell by 62,000 to 20.544 million in June 6 week after a decrease of 662,000 in the previous week. The insured rate slipped to hold steady at 14.1%

Also released at the same time, the Philadelphia Fed’s manufacturing index jumped to a reading of 27.5 in June from -43.1 in May, the first positive reading since February.

The Empire State reading, released on Monday, improved to -0.2 in June from -48.5 in May, suggesting little change in conditions in the month rather than sharp contraction. There are other regional data scheduled for release next week.

In the Philadelphia region, the readings for new orders and production have moved back into positive territory. The employment reading remained negative, but the pace of contraction slowed.

The six-month outlook rose sharply, with 75% of respondents saying they expected improvement by the end of the year.

Kevin Kastner

Julie Ros

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