U.S. Initial Claims low but Philly Fed plunges, mixed housing data
Initial jobless claims at 215k from 224k are at their lowest since February 8, and this release covers the survey week for April’s non-farm payroll. However, a Philly Fed manufacturing index of -26.6 suggests tariffs are hitting the regional manufacturing sector in April. March housing data is mixed, permits strong with a 1.6% rise to 1482k but starts down 11.4% to 1324k.
The initial claims drop does not signal a dramatic change in trend but hints of an upturn in trend seen in early March (largely due to one high figure) have since faded, suggesting the labor market remains strong.
Continued claims saw a 41k rise to 1.885m to correct a preceding 49k fall. Such volatility is not unusual and trend seems to be fairly stable. Continued claims cover the week before initial claims.
April’s Philly Fed index is the weakest since April 2023 and new orders at -34.2 from 8.7 are weaker still, though employment managed to remain barely positive at 0.2, if down from 19.7 in March.
The Empire State manufacturing survey was notable for particularly weak 6 month expectations. The Philly Fed 6 month index held up better, rising marginally to 6.9 from 5.6, but is still sharply below February’s 27.8.
Price data was stronger if not sharply, prices paid at 51.0 from 48.3 the highest since July 2022 and prices received at 30.7 from 29.8, this still below February’s level.
6-month price data was clearly stronger, paid at 62.3 from 48.9, the highest since April 2022 and received surging to 67.7 from 39.7, to their highest since June 2021.
The housing permits gain is probably misleading as it came fully in a 9.3% rise in multiples, the first rise in that series in four months. Single permits fell by 2.0% and may be starting to slip from a previously stable picture.
The starts decline was led by a 14.2% fall in singles which more than reverse a 9.5% February increase, while multiple starts fell by a modest 3.5%. It is normal for the starts level, 1324k, to be below that of permits, at 1482k.
