Weekly Unemployment Claims Fall; Mixed Results in June Manufacturing Outlook
Mixed Current Indicators
The general activity index fell to 1.3, its lowest since January. About 24% of firms reported increased activity, while 23% saw declines. The new orders index improved slightly but remained negative at -2.2. The shipments index dropped to -7.2. Employment remained weak, with the index at -2.5, indicating a continued decline despite a slight improvement.
Rising Prices
Price pressures increased, with the prices paid index rising to 22.5, and the prices received index climbing to 13.7. Nearly 26% of firms reported higher input prices, while 14% noted higher prices for their goods.
Production and Capacity Utilization
Half of the firms reported increased production for Q2 compared to Q1, while capacity utilization remained stable at 70-80%. Labor supply constraints eased slightly, but energy market concerns grew.
Future Expectations
Future activity indicators showed less optimism. The future general activity index fell to 13.8, and future new orders and shipments indexes declined significantly. Firms expect modest employment growth and rising price pressures over the next six months.
Market Forecast
The overall data suggests a mixed outlook. The decrease in unemployment claims points to a strengthening labor market, but persistent challenges in manufacturing and rising price pressures indicate caution. Therefore, the market outlook remains bearish in the short term.
