In a positive surprise for the labor market, new U.S. unemployment claims declined during the week ending July 12, according to fresh data from the Labor Department released Thursday.
Initial applications for unemployment benefits dropped by 7,000 to 221,000, down from a revised 228,000 the prior week. This defied economist forecasts, which had anticipated an increase to 235,000 from the originally reported 227,000.
The four-week moving average, designed to smooth out short-term fluctuations, also eased—falling by 6,250 to 229,500 from the previous week’s revised 235,750.
Meanwhile, consumer spending showed renewed strength. The Commerce Department reported that U.S. retail sales bounced back sharply in June, rising 0.6% following a 0.9% decline in May. Analysts had expected only a marginal 0.1% increase.
Excluding motor vehicles and parts, retail sales were up 0.5% in June, also exceeding expectations. That came after a slight 0.2% dip the month prior, with economists having projected a more modest 0.3% increase for June.
On the pricing front, U.S. import prices inched higher by just 0.1% in June—less than the anticipated 0.3% rise—following a downwardly revised 0.4% decline in May. Export prices, however, rose by 0.5% after slipping 0.6% the month before, marking a stronger-than-expected rebound.
Regional manufacturing data from the Federal Reserve Bank of Philadelphia added another bright spot. Its general activity index surged to +15.9 in July, reversing from -4.0 in June and beating projections for a reading of -1.0. The index’s return to positive territory suggests expanding factory activity across the region.
Forward-looking indicators in the same report show that manufacturers continue to anticipate business growth over the next six months.
Later Thursday, a slate of additional economic updates and Fed speeches are on deck:
- At 10:00 a.m. ET, the National Association of Home Builders will release its housing market index, with expectations for a slight uptick to 33 in July from 32 in June.
- Also at 10:00 a.m., the Commerce Department will publish its May business inventory report, with flat results expected for the second month in a row.
- At the same time, Federal Reserve Governor Adriana Kugler will address the Housing Partnership Network Symposium, sharing her perspective on the housing market and the broader U.S. economy.
- San Francisco Fed President Mary Daly will speak at 12:45 p.m. ET at the Rocky Mountain Economic Summit.
- At 1:30 p.m. ET, Governor Lisa Cook is set to discuss artificial intelligence and innovation at the NBER Summer Institute.
- Finally, Fed Governor Christopher Waller will provide his economic outlook in an address to the Money Marketeers of NYU at 6:30 p.m. ET.
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