6/11: MetroIntelligence Economic Update by P. DUFFY

Initial unemployment claims drop to 1.5 million, continuing claims drop to 20.9 million

In the week ending June 6, initial unemployment claims were 1,542,000, a decrease of 355,000 from the previous week’s revised level.  Continuing claims during the week ending May 30 were 20,929,000, a decrease of 339,000 from the previous week’s revised level. 



Federal Reserve to keep interest rates low indefinitely, support mortgage and business liquidity

The Federal Open Market Committee decided to maintain the target range for the federal funds rate at 0 to 1/4 percent until it is confident that the economy has weathered recent events and is on track to achieve its maximum employment and price stability goals. To support the flow of credit to households and businesses, over coming months the Federal Reserve will increase its holdings of Treasury securities and agency residential and commercial mortgage-backed securities at least at the current pace to sustain smooth market functioning, thereby fostering effective transmission of monetary policy to broader financial conditions. In addition, the Open Market Desk will continue to offer large-scale overnight and term repurchase agreement operations. 



Inflation tracker Producer Price Index rebounds 0.4 percent in May, still down 0.8 percent year-on-year

The Producer Price Index for final demand rose 0.4 percent in May, following declines of 1.3 percent in April and 0.2 percent in March.  The final demand index decreased 0.8 percent for the 12 months ended in May. Prices for final demand less foods, energy, and trade services edged up 0.1 percent in May, following three consecutive declines. For the 12 months ended in May, the index for final demand less foods, energy, and trade services moved down 0.4 percent, the largest 12-month decrease since the index began in August 2013.



Share of Americans thinking economy improving rises to 33 percent in late May

Gallup:  After sliding in March and April, Americans’ ratings of the nation’s economy remained low in May and have not improved at the start of June. The latest poll was conducted May 28-June 4, just prior to the federal May jobs report showing an unexpected decline in unemployment.  According to the poll, fewer than one in four U.S. adults, 23 percent, rate current economic conditions as excellent or good, essentially tying last month’s low point, the lowest that Gallup has recorded during the coronavirus pandemic.  At the same time, while also low, more Americans today (33 percent) than in April (22 percent) think the economy is getting better.