–Initial Claims Level Fell By 1.370 Mln to 5.245 Mln, Continuing Claims Spike
–Housing Starts Pace Slows to 1.216 Mln SAAR, Permits Slow to 1.353 Mln
–April Philadelphia Fed Index Drops To -56.6, Echoing Drop in Empire Survey
By Kevin Kastner
WASHINGTON (MaceNews) – The growth rate of initial claims slowed further in the April 11 week from the spike in late-March, but filings remain extremely high and lifted the total number of new claims filed over the last four weeks to 22.034 million.
The level of initial claims fell by 1.370 million to 5.245 million in the current week, reflecting not only further layoffs, but also backlogged filings from the previous week.
The level of initial claims should remain elevated in the coming weeks as many workers are still trying to get into their state systems. Until these backlogs work down, initial claims will remain elevated.
The consensus forecast was for a 5.50 million level following an upward revised 6.615 million level in the previous week. Unadjusted claims fell by 1.240 million in the current week.
The Labor Department again noted the impact of COVID-19, but not specify which industries were the key drivers, suggesting the gains were widespread.
The unadjusted state data showed initial claims declined in a number of states, especially California, Michigan, and New Jersey, but an increase in claims in New York. All remain at extremely high levels.
Continuing claims, the total number of people currently receiving benefits, rose by 4.530 million to a record 11.976 million in the April 4 week. The insured unemployment rate jumped to 8.2% from 5.1% in the previous week.
The level of those receiving benefits will be elevated for several months. Some workers will return to their old jobs, while others may need to find new ones, lengthening their time on benefits.
Released at the same time, the pace of home building slowed dramatically in March. Even though construction has been exempted as an essential business in most states, builders remain reluctant to start building new homes that may not be sold.
The pace of housing starts fell 22.3% to a 1.216 million annual rate, below the 1.32 million pace expected. Single-family starts fell by 17.5%, while multi-family starts fell by 31.7%.
Building permits, which give an indication of future starts activity, slowed by 6.8% to a 1.353 million pace, slightly ahead of the 1.30 million pace expected. A 12.0% decline in single-family starts was the key factor, as multi-family permits rose by 4.9%.
Data on homes under construction and those completed suggest that the supply of new homes for sale will decline in the coming months, possibly at a time when food traffic picks back up again.
The National Association of Home Builders sentiment index declined sharply in April when it was released on Wednesday, indicating the beginning of a downward trend in home building.
Also released, the Philadelphia Fed’s manufacturing index fell to a reading of -56.6 in April from -12.7 in March, the lowest reading since 1980 and coming a day after the New York Fed region’s Empire State index plunged to another record low for the same month.
In the Philadelphia Fed region, there were notable declines in new orders, shipments, hours worked, employment and prices paid, all into contraction territory. Delivery times lengthened due to the factory shutdowns.
Additional regional conditions data will be released in the coming weeks, starting with Kansas City next Thursday.
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Contact this reporter: kevin@macenews.com