For the past five months, the number of Americans filing for unemployment benefits have deceased more than expected last week suggesting strong work gains that will lead to future economic growth. Despite a recent ebb in inflation pressures, continued labor market strength will likely keep the Federal Reserve on track to raise interest rates for the third time this year. They are also planning to reduce their $4.2 trillion portfolio of Treasury bonds and mortgage backed securities.
State unemployment benefits have dropped nearly 15,000 to a seasonally adjusted 233,000 for the week which ended on July 15. This is by far the lowest level since February when claims fell to 277,000 marking it the best reading since March 1973. The labor market is reaching full employment with the unemployment rate reaching at only 4.4%. 222,000 jobs were created last month making it the second biggest payrolls increase this year.
An increase in orders received by factories showed a moderation in manufacturing activity in the mid-Atlantic region in July. 37% of firms reported increases in activity this month while 31% of factories reported a rise in new orders. 17% of manufacturers reported an increase in factory employment this month while only 6% reported a decrease.