Each day the Research staff takes a look at recently released economic indicators, addressing what these indicators mean for REALTORS® and their clients. Today’s update highlights jobless claims and factory orders.
- Jobless claims are slightly down again this week — by 6,000 — though this is not helping much with demoralizing trend of increases in the few weeks prior.
- The new claims are still at 425,500 for the four-week average, which is above the needed 400,000 level for continued improvement in jobs. Yet the figure from one month ago was at 432,250, which is 14,000 higher than today's levels.
- Continuing claims inched down only slightly. This indicates almost no improvement in the job market in May, though tomorrow’s employment situation report will provide a more detailed picture of the situation.
- The largest increases in initial were in California (+7,053), Massachusetts (+1,948), South Carolina (+1,066), Wisconsin (+1,019), Pennsylvania (+959), while the largest decreases were in Alabama (-1,448), Oregon (-1,104), Kentucky (-696), Idaho (-557) and Hawaii (-438).
- If jobless claims stays up like the past week and do not trend down, NAR expects less than 1.5 million net new jobs in the next 12 months, which would barely lower the unemployment rate.
- Factory orders fell 1.2 percent in April, largely driven by a drop in demand for durable items such as motor vehicles, machinery, metals, computers, electrical equipment, and aircraft and parts.
- The transportation sector saw the largest drop as orders fell 9.3 percent. The auto industry has been hit particularly hard due to supply disruptions, price increases, high fuel costs and general economic anemia.
- Excluding transportation, orders were still down 0.2 percent. Capital goods and defense orders also dropped. Excluding defense orders, overall factory orders declined for the first time in the last eight months, and sharpest decline over a year.
- The numbers for non-durable goods, apparel, chemicals, paper and other products, were up mostly due to rising food and oil prices.