• U.S. jobless claims fell to 213K, signaling continued labor market resilience, but insured unemployment hit a 3-year high at 1.91M.
• November manufacturing activity weakened as the general activity index turned negative, falling to -5.5 from 10.3.
• Manufacturers report positive employment trends; the workweek index surged to its highest since April 2022 at 17.4.
• Firms remain optimistic, with the future activity index soaring to 56.6, its highest since June 2021, forecasting strong growth.

Unemployment Claims Update

For the week ending November 16, seasonally adjusted initial unemployment claims fell to 213,000, a decrease of 6,000 from the previous week’s revised figure of 219,000. This matches pre-report estimates. The four-week moving average also dipped by 3,750 to 217,750, reflecting a steady downward trend.

However, insured unemployment saw a slight increase. The seasonally adjusted insured unemployment rate rose to 1.3% for the week ending November 9, up 0.1 percentage points. Total insured unemployment reached 1.91 million, its highest level since November 2021. The four-week moving average of insured unemployment also climbed to 1.88 million. On an unadjusted basis, initial claims fell by 7.7%, beating expectations for a smaller decline.

Manufacturing Business Outlook

Regional manufacturing activity softened in November, as per the latest Manufacturing Business Outlook Survey. The current general activity index slipped into negative territory, falling from 10.3 to -5.5, indicating a contraction. However, the new orders (8.9) and shipments (4.5) indexes remained positive, suggesting some resilience.

Employment trends improved, with the employment index rising to 8.6 after flat results last month. Meanwhile, the average workweek index surged to its highest level since April 2022 at 17.4. Input and output prices increased at slower rates, with firms reporting a median price hike of 3.0% over the past year.

Firms’ Expectations

Despite current softness, manufacturers hold an optimistic six-month outlook. The future general activity index jumped to 56.6, its highest level since June 2021. Expectations for new orders, shipments, and employment also surged. However, firms forecast a 3.0% inflation rate for U.S. consumers and expect wages to rise 3.4% in the coming year.

Market Forecast

• Labor Market: A robust labor market continues to underpin broader economic stability, with declining initial claims signaling ongoing resilience.
• Manufacturing Sector: While current conditions softened, strong future sentiment suggests the potential for a recovery, supported by anticipated increases in orders and employment.
• Outlook: Expect a neutral to slightly bullish market impact, with labor stability balancing manufacturing challenges.