Employment Data Came in Weak ahead of Fed Decision
XLI declined with the rise in jobless claims
With more people applying for unemployment insurance claims, the Industrial Select Sector SPDR Fund (XLI) has dropped 0.47% over the past week as of December 10. Even the broad-based Direxion Daily S&P 500 Bull 3X ETF (SPXL) and the SPDR S&P 500 ETF (SPY) fell 8.5% and 2.1%, respectively, over the same period.
US initial jobless claims increased by 13,000 for the week ended December 5
According to the US Department of Labor, initial jobless claims stood at 282,000 for the week ended December 5, an increase of 13,000 from the prior week’s unrevised level of 269,000. The reading was weaker than the consensus estimate of 270,000.
With increasing claims, industrial stocks Caterpillar (CAT), Rockwell Automation (ROK), and Emerson Electric (EMR) have declined 5.2%, 0.94%, and 3.4%, respectively, as of December 10 from a week ago.
Continuing claims increased by 82,000 in the last week of November
Along with initial jobless claims, continuing claims are released with a one-week lag. Continuing claims had also seen a rise of 82,000 for the week ending November 28. The continuing claims increased to 2,243,000 as compared to 2,161,000 in the previous week.
Manufacturers remain cautious about employment in December
Both initial and continuing jobless claims have increased as per the latest release. The initial claims reading has remained below 300,000 for quite some time, indicating that the labor market is regaining strength with sustained demand. However, the recent jump in jobless claims is one of the highest in the last 28 weeks.
The further slowdown in export orders and production levels may prompt manufacturers to shed jobs going forward. In the next article, let’s look at how lower price pressure in the economy could influence import and export prices.
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