The latest data on new filings for unemployment insurance suggest the labor market remains tight. Data from the Employment and Training Administration within the Department of Labor show initial claims for new unemployment insurance fell to 233,000 for the week of July 15. The weekly result is down from a revised 248,000 in the prior week. Using a four-week average to smooth out weekly volatility, the latest average came in at 243,750, down from 246,000 in the prior week. A level of claims below 300,000 is considered consistent with a strong labor market.
Initial claims have been bouncing around at the lowest levels since the 1970s. When measured as a percentage of payroll employment, claims are about 0.16 percent, near record-low levels and well below the levels seen in the 1970s.
The Leading Economic Index from The Conference Board posted a 0.6 percent increase in June following 0.2 percent increases in April and May. According to the press release from The Conference Board, “The U.S. LEI rose sharply in June, pointing to continued growth in the U.S. economy and perhaps even a moderate improvement in GDP growth in the second half of the year,” said Ataman Ozyildirim, Director of Business Cycles and Growth Research at The Conference Board. “The broad-based gain in the U.S. LEI was led by a large contribution from housing permits, which improved after several months of weakness.”
The strong performance shown in the LEI adds a positive tone to the favorable though somewhat weaker performance of the AIER Leaders index. Despite some softness in autos and housing, we can see that a strong labor market, an AIER Leaders index still well above neutral, and gains in the LEI suggest continued economic growth in the coming months and quarters.