Good News, Bad News on Jobless Claims

One step forward, one step back this week on the employment front. Initial jobless claims unexpectedly fell by 29,000 to 429,000, the Labor Department said, but continuing claims surged 247,000 to 4.68 million. A Bloomberg survey had expected initial jobless claims to fall to 445,000. Meanwhile, the four-week moving average declined 11,750 to 455,250.

Jobless claims need to drop below 400,000 during the next two quarters to give economists and investors confidence that commercial activity is increasing at a pace that prompts most companies to curtail layoffs and resume hiring.

A robust economy should also include a substantially lower continuing claims total. During the 1980s economic expansion, continuing claims fell below 2.5 million. And during the 'Roaring 90s' boom, they fell below 2.0 million.

A year ago, initial jobless claims totaled 538,000, the four-week moving average was at 581,500, and continuing claims totaled 6.22 million.

In other good news, the number of people claiming Emergency Unemployment Compensation benefits decreased 236,162 to 3.91 million for the week ending June 26, the latest week for which data is available.

The highest insured unemployment rates for the week ending June 26, the latest week for which data is available, were in Puerto Rico, 6.3%; Oregon, 5.0%; Alaska, 4.8%; Pennsylvania, 4.7%, and Nevada, 4.4%.