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 7/17/08 For wk 7/12 2008 | ||||||||||||
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Highlights
Jobless claims data were mixed and in sum point to no change in what is a slowly contracting jobs market. Initial claims jumped 18,000 in the July 12 week, a gain that's compared against a steep drop in the holiday shortened July 5 week. The four week average fell 4,500 to 376,500, little changed from the 376,000 average in the June 14 week -- a comparison between survey periods of the monthly household employment survey.
Continuing claims, in data for the July 5 week, fell 81,000 to 3.122 million. But the four-week average continues to rise, up 16,500 to 3.143 million for the highest rate in 4-1/2 years. Continuing claims have been rising all year, returning to 3.0 million plus levels last seen at the beginning of the expansion and consistent with deterioration seen in underlying payroll data.
July is a bumpy month for this series given temporary layoffs in the auto industry for annual retooling. Today's results are best described as flat despite the headline spike in initial claims. Markets were moving after the release, specifically a rise in Treasury yields, but this is likely in reaction to a surprising and welcome spike in housing starts.
Initial jobless claims were surprisingly strong in the latest report but the labor picture is definitely mixed as continuing claims rose sharply. Initial jobless claims fell 58,000 in the week ending July 5 to a 346,000 level that's the lowest since mid-April. The reporting week is of course a holiday week which typically makes for large swings and puts special emphasis on the four-week average which came in at 380,500 for a 10,000 decline. But continuing claims, in data for the week ending June 28, jumped 91,000 to 3.202 million for the highest reading in five years. Though from an employer's perspective the economy is sluggish, good workers are still hard to find, resulting in a reluctance to either lay off existing workers or hire new workers.
Jobless Claims Consensus Forecast for 7/12/08: 378,000
Range: 365,000 to 390,000
![[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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