On Thursday, a day after the Fed decided to maintain benchmark rates unchanged, the Department of Labour released data on initial jobless claims recorded in the past week, while the Census Bureau published the number of new durable goods ordered for the month of June. Initial jobless claims edged up by 10 thousand and durable goods orders increased by more than double the expected figure. The core measure of durable goods orders, which excludes transportation items, marginally grew, but came in below expectations and the figure from the previous month. The dollar did not show any significant reaction to the data.
According to the Department of Labour, last week 244 thousand individuals (seasonally adjusted) applied for unemployment benefits, exceeding the 234 thousand from the preceding week (the result of an upward revision from 233 thousand) and the expected figure of 241 thousand. The four-week claims average, which irons out weekly volatility, remained unchanged at 244 thousand.
Regarding durable goods ordered for the month of June, the Census Bureau estimated that new orders for long lasting manufacturing goods increased massively by 6.5% month-on-month compared to a contraction of 0.1% in May, surprising analysts who instead anticipated a rise by 3.0%. This increase was the highest since August 2014. Core orders fell short of expectations, rising slightly by 0.2% and coming in below May’s upwardly revised 0.6% (from 0.1% before). The bureau also released the June goods trade balance. The figures showed the trade deficit decreasing to reach $63.86bn, down from a $65.90bn in the previous month and below the $65.00bn that was expected. Exports picked up by $1.8bn in June to reach $128.6bn and imports decreasing by $0.7bn to stand at $192.4bn drove the deficit down.
Although applications for unemployment benefits rose during the past week, the labour market remains robust as the US economy continues operating close to full employment with the unemployment rate being at the lowest level since 2007 at 4.3% as of July 2017. Moreover, the decline in the trade deficit in June is likely to positively contribute to second quarter GDP growth given rising exports. US preliminary second quarter GDP estimates will be released tomorrow.
In the forex markets, euro/dollar didn’t have much of a reaction to the data. Dollar/yen posted some minor gains within the first few minutes of data release, rising to 111.47 from 111.31 previously. In late European trading hours, euro/dollar was down 0.2% on the day, trading at 1.1661. Meanwhile, dollar/yen was 0.1% up at 111.57.
