US Jobs Robust, Manufacturing Mixed: Unemployment Down, Production Up, Outlook Cautious

Four-Week Average Trends Lower

The four-week moving average of initial claims, which smooths out weekly fluctuations, fell by 3,500 to 227,500. This downward trend further supports the notion of a robust job market, with fewer workers seeking unemployment benefits.

Insured Unemployment Rate Stable

The insured unemployment rate remained steady at 1.2% for the week ending September 7, while the number of individuals receiving unemployment benefits decreased by 14,000 to 1,829,000.

Manufacturing Sector Shows Mixed Performance

The Philadelphia Federal Reserve’s Manufacturing Business Outlook Survey for September 2024 revealed a complex picture of regional industrial activity. The current general activity index turned positive, rising to 1.7 from -7.0 in the previous month. However, new orders and shipments indices declined and entered negative territory, signaling potential challenges for manufacturers.

Employment and Price Pressures in Manufacturing

Despite mixed overall data, employment in the manufacturing sector showed improvement. The employment index rose from -5.7 to 10.7, indicating increased hiring activity. Concurrently, both input costs and prices received by manufacturers increased, with the prices paid index reaching its highest level since December 2022.

Production and Capacity Utilization

A higher proportion of firms reported increased production for the third quarter compared to those reporting decreases. The median capacity utilization rate remained stable at 70-80%. Labor supply continues to be a constraint for over half of the surveyed firms.

Future Outlook

Manufacturers maintain a positive outlook for the next six months, with expectations for growth becoming more widespread. The future general activity index held steady at 15.8, while indices for new orders, shipments, and employment all showed improvements.