New unemployment claims are compiled weekly to show the number of individuals who filed for unemployment insurance for the first time. An increasing (decreasing) trend suggests a deteriorating (improving) labor market. The four-week moving average of new claims smoothes out weekly volatility. Why Investors Care
| Released on 7/26/07 For wk 7/21 2007 | ||||||||||||
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Highlights
Jobless claims continue to signal tight conditions in the labor market, with initial claims down 2,000 in the July 21 week to 301,000. There were no special factors in the latest week. The four-week average of 308,500 is the lowest since early June. Continuing claims for the July 14 week, which is the survey week for the monthly payroll report, indicate less strength, falling 19,000 to 2.545 million but sizably above the 2.485 million level in the June payroll week.
Despite the slight elevation in continuing claims, claims data as a whole point to another month of firm payroll growth, and perhaps too firm for Federal Reserve officials who are keeping an eye on wage pressure. Markets showed no initial reaction to the results which were released alongside a mixed durable goods report.
Initial jobless claims fell 8,000 in the week ending July 14 to 301,000, pushing down the four-week average by 6,250 to 312,000. Initial claims have fallen in three of the last four weeks. Clearly, the labor market is tight and may be getting tighter. This is a major concern for the Fed. The claims data are pointing toward a stronger payroll gain in July and perhaps a tick down in the unemployment rate. Markets should be giving the claims numbers more attention as the Fed likely is doing.
Jobless Claims Consensus Forecast for 7/21/07: 312,000
Range: 305,000 to 315,000
![[Chart]](chart.gif)
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Weekly series fluctuate more dramatically than monthly series even when the series are adjusted for seasonal variation. The 4-week moving average gives a better perspective on the underlying trend. |
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