For the week ended March 12, the first seasonally adjusted unemployment claims were 214K, down 15K from the previous week's revised level. The 4-week moving average is 223K, down 8,750 from the previous week's revised average. The previous week's average was revised up by 500 from 231,250 to 231,750.
Unemployment claims, which coincide with the March employment data survey, remain at their recent low. With this trend, the tight conditions suggested by the unemployment rate of 3.8% are reflected in the labor market. Along with the developments in the labor supply, the demand for high wages to compete with inflation is still at the forefront.
The US housing market is carefully monitored for the economic repercussions of rate hikes. Private sector residences allowed with building permits in February were at a seasonally adjusted annual rate of 1,859K. This is 1.9% below the revised January rate of 1,895K, but 7.7% above the 1,726K rate in February 2021. Housing starts in February were at a seasonally adjusted annual rate of 1,769K. Housing prices continue to rise. Seasonal factors increase the size of the increase. The sector needs to be mobilized in order for the movement in the stocks, which occurred with the demand after Covid, to turn positive again with new home productions.
The Philadelphia Fed index of manufacturing activity rose to 27.4 in March from 16 in February. Manufacturing activity in the region continued to grow. The survey's indicators for overall activity, shipments and new orders improved after falling last month. The employment index and both price indices rose and continued to rise. The overall future activity of the survey, new orders and shipping indices were moderate, but surveyed firms remained generally optimistic about growth over the next six months.
The worst of inflation news is not over: Supply chain bottlenecks are getting worse again. At the same time, we will be watching for signs that demand has taken a hit. In the short term, Russia's invasion of Ukraine may encourage an increase in precautionary purchases, offsetting some of the downside from growing uncertainty.
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