MetroIntelligence Economic Update by P. DUFFY
Employment rose by 4.8 million in June, unemployment rate falls to 11.1 percent
Total nonfarm payroll employment rose by 4.8 million in June, and the unemployment rate declined to 11.1 percent. Employment in leisure and hospitality rose sharply. Notable job gains also occurred in retail trade, education and health services, other services, manufacturing, and professional and business services. The employment-population ratio, at 54.6 percent, rose by 1.8 percentage points over the month but is 6.5 percentage points lower than in February.
Initial unemployment claims slip down to 1.43 million, continuing claims edge up to 19.3 million
In the week ending June 27, the initial unemployment claims were 1,427,000, a decrease of 55,000 from the previous week’s revised level. Continuing claims during the week ending June 20 was 19,290,000, an increase of 59,000 from the previous week’s revised level. The previous week’s level was revised down by 291,000 from 19,522,000 to 19,231,000.
Factory orders rebound 8.0 percent in May after two months of declines
New orders for manufactured goods in May, up following two consecutive monthly decreases, increased 8.0 percent after a 3.5 percent April decrease. Shipments, up following four consecutive monthly decreases, increased 3.1 percent after a 14.0 percent April decrease. Unfilled orders, up following two consecutive monthly decreases, rose 0.1 percent after a 1.5 percent April decrease.
Purchase loan apps decline slightly due to limited supply, rates flat
The MBA’s Market Composite Index decreased 1.8 percent on a seasonally adjusted basis from one week earlier, with purchase loans falling 1 percent (but up 15 percent year-on-year) and refinance activity falling 2 percent (but up 74 percent year-on-year). The weakening in activity is potentially a signal that pent-up demand is starting to wane and that low housing supply is limiting prospective buyers’ options. The average contract interest rate for 30-year fixed-rate mortgages decreased to 3.29 percent from 3.30 percent.
Fewer job cuts announced in June, but economy remains fragile
Job cuts announced by U.S.-based employers hit 1,238,364 in the second quarter, the highest quarterly total on record. June job cuts totaled 170,219, down 57% from May’s total of 397,016, but up 306% from the same month last year. We are beginning to see the impact of the recession spreading to companies that were not directly impacted by the virus. At the same time, companies that attempted to reopen but were only able to attract a fraction of their pre-COVID customers are closing down again. Meanwhile, a number of high-profile companies are filing for bankruptcy.