US Jobless Claims Surge: Manufacturing Declines and Inflation Concerns Emerge
US Jobless Claims Increase Amid Weakening Regional Manufacturing and Rising Inflation Pressures
Date: August 21, 2025
Author: James Hyerczyk
Recent US numbers show the link between rising jobless claims and slowing growth in manufacturing. Labor market data now joins manufacturing figures in pointing to a softer economy. Traders worry as the Federal Reserve reads these signals when it sets its next steps.
Rising Jobless Claims Signal Cooling Labor Market
Initial US claims reached 235,000 for the week ending August 16. This number beats forecasts of 225,000 and sits at the highest level since June. The rise builds week after week. Continuing claims now total 1.97 million; they top past expectations and hit a peak last seen in November 2021. These signs tie more workers to unemployment benefits. They also connect weak labor demand with possible market shifts ahead of a Federal Reserve meeting. The data keep both traders and analysts alert.
Manufacturing Sector Outlook Deteriorates
The August Manufacturing Business Outlook Survey shows manufacturing losing ground. The overall activity index falls from 15.9 to -0.3. New orders sink into negative figures at -1.9 for the first time since April. Shipments drop to 4.5, while the employment index falls to 5.9, yet it still hints at some hiring.
A slight rise in the average workweek cannot mask the decline in new orders. Seventy-four percent of companies report no changes in employment, while only 16% see more workers. This pattern ties low order levels to weak regional production in the third quarter.
Inflationary Pressures Remain Elevated
Prices keep rising as manufacturers face higher bills and costs. The prices paid index jumps by 8 points to settle at 66.8, a level unseen since May 2022. Meanwhile, prices received by manufacturers grow to 36.1. Firms now expect 12-month cost rises to reach 4.1%, up from 3.8% back in May.
More than half of the companies expect costs to rise over the next six months. Seventy-one percent see competitors raise prices soon. Even though forecasted wage growth slows from 4.0% to 3.5%, high input and output price expectations hold inflation high.
Market Implications: Cautious Sentiment on Economy and Fed Policy
The mix of rising unemployment claims, soft manufacturing orders, and ongoing inflation yields a mixed outlook. Firms keep a positive view for the future even as current figures show slowing growth. Analysts see these links as a sign of trouble for US equities and industrial stocks. All eyes now turn to upcoming job reports and inflation readings to fix views on Fed moves in this shifting scene.
About the Author
James Hyerczyk is a skilled technical analyst and educator based in the US. He brings over 40 years of experience with market charts and price trends. He has written several books and knows the futures and stock markets well.
For ongoing economic news and analysis, visit FXEmpire’s Economic Calendar and Market Forecasts.
Disclaimer: This article serves for educational and informational aims. It should not stand as investment advice. Be sure to do your own research and talk with financial experts before taking any action.
Full money-growing playbook here:
youtube.com/@the_money_grower
