U.S. unemployment claims dropped by 6,000 to 233,000 for the week ending June 22, yet continuing claims hit a 2.5-year high, indicating easing labour market conditions. Business spending on equipment fell 0.6% in May, and a rise in the goods trade deficit further signalled slowing economic growth. These softer data points increase the likelihood of Federal Reserve rate cuts in September. Despite the slowdown, analysts do not foresee an imminent recession, suggesting the economy is on track for a soft landing.

Key Points:

  • Unemployment claims fell, but continuing claims reached a 2.5-year high.
  • Business spending on equipment and exports declined in May.
  • The goods trade deficit widened, raising concerns about GDP growth.
  • Analysts predict the Fed may cut rates in September amid easing inflation pressures.
  • The labor market shows mixed signals with no immediate recession expected.