Nov 16, 2023
Among a large slate of economic data released this morning, jobless claims disappointed with both initial and continuing claims coming in higher than expected. For initial claims, the seasonally adjusted number rose meaningfully from an upwardly revised 218K last week to 231K. That compares with expectations of a more modest increase to 222K. That brings claims back to the highest level since the week of August 19th, and the 13K week over week rise was the largest since the first week of August.
On a non-seasonally adjusted basis, claims have continued their steady rise as is normal for this time of year. At 215.9K, this week’s print was slightly higher than the comparable week last year, but also below those from the several years prior to the pandemic. In other words, claims are deteriorating, but from what are still strong levels.
Continuing claims, on the other hand, keep looking worse every week. Continuing claims have now risen for eight straight weeks, bringing it up to 1.865 million. That surpassed a high from this past April to make for the most elevated reading since November 27, 2021.
As we have noted in recent weeks, the size of the move in continuing claims over the past couple of months has been comparable to the size of increases around prior recessions. The same can be said for the consistency of upward moves in continuing claims. As shown below, the eight straight weeks of higher readings is the largest since the spring of 2020. Prior to that, most streaks of that size or longer occurred in the midst of a recession with the exception of the other two most recent instances in November 2018 and December 2019.
Nov 15, 2023
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Nov 15, 2023
The New York Fed gave us the first regional reading on manufacturing conditions this morning with the release of the Empire State Manufacturing Survey. The headline number rose back into expansion at 9.1, well above expectations of an improvement to only -3. Although the current conditions index improved, expectations dropped a massive 24 points month over month. That ranks as the fourth largest one month decline in this reading on record behind September 2001 and January 2009.
Below we show a breakdown of each category of the report for both current conditions and 6-month expectations indices. Although General Business Conditions improved dramatically, breadth was otherwise negative. Of the other categories, only three rose month over month. Expectations likewise had more categories falling than rising leaving multiple categories at or near the bottom of their respective historical ranges dating back to the start of the survey in 2001.
The report indicated weak demand as new orders currently remain in contraction. Meanwhile, Unfilled Orders are far more depressed at -23.2 making the November reading the lowest since December 2014. Shipments have been increasingly choppy during the post-pandemic period, but the November reading did improve up to 10, slightly below the historical median. Meanwhile, Inventories were much more elevated. Rising 11.2 points month over month, inventories are now in the top decile of their historical range with the first expansionary reading in six months.
Employment metrics were also weak with both the number of employees and average workweek indices sitting in contraction. However, these were also two of the strongest categories relative to historical ranges of anywhere in the report. In fact, Average Workweek expectations hit the highest level since March of last year. While those labor expectations remain healthy, the same cannot be said for capital spending. Expected tech spending hit a new post-pandemic low while capital expenditure plans likewise returned to the low end of its range.
