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 7/3/08 For wk 6/28 2008 | ||||||||||||
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Highlights
Today's monthly employment may have shown expected and perhaps acceptable rates of contraction, but jobless claims data may be pointing to more severe trouble ahead. Initial jobless claims rose past the 400,000 level in the June 28 week, up 16,000 to 404,000 for the worst reading in three months and lifting the four-week average to 390,500 -- the highest level since October 2005. Continuing claims remain above 3.0 million, at 3.116 million for a 19,000 decline in data for the June 21 week. The four-week average is at 3.111 million.
For the markets, this report will be pushed aside by the employment report, but continuing climbs in claims in future weeks will point squarely at further erosion in consumer health and possible recession.
Initial jobless claims are holding relatively steady at somewhat elevated levels but there has been a steady upward creep in continuing claims. Initial claims were unchanged in the week ending June 21, coming in at 384,000. However, continuing claims reversed the prior week's drop with an 82,000 rise to a four-year high of 3.139 million for the week ending June 14. Initial claims peaked at about 450,000 in the 2001 and 1991 recessions with continuing claims peaking in both recessions at about 3.5 million. The continuing upward trend in continuing claims indicates that the labor market is weaker than suggested by just initial claims and helps corroborate a recent rise in the unemployment rate at least in part.
Jobless Claims Consensus Forecast for 6/28/08: 385,000
Range: 375,000 to 395,000
![[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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