New Jobless Claims Rise, Seasonal Factors in Play
The Labor Department cautioned that the initial jobless claims statistic can be especially volatile during July/August, due to normal, season auto company end-of-the-model-year shutdowns to retool for next year's models, and due to other seasonal factory shut-downs. A Bloomberg survey had expected initial jobless claims to total 450,000.
Meanwhile, the four-week moving average also rose 1,250 to 456,000. Economists emphasize the four-week moving average, since it smooths-out anomalies due to holidays, strikes and weather-related layoffs.
Continuing claims fell 223,000 to 4.49 million. A year ago, initial jobless claims totaled 564,000, the four-week moving average was at 585,575, and continuing claims totaled 6.12 million.
Jobless Claims: Far From Normal Level
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.
States also reported 3.48 million persons claiming Emergency Unemployment Compensation benefits for the week ending July 3, the latest week for which data is available, a decrease of 404,049 from the prior week.
However, most of the large decrease stems from adults who have exhausted their emergency benefit, due to Congress' failure to extend emergency assistance. On Wednesday, the U.S. Senate finally passed the emergency unemployment benefit extension, an action that, after President Barack Obama's expected signature Thursday, will result in the resumption of the benefit for the 2.5 million Americans whose benefits expired earlier this year.
The highest insured unemployment rates for the week ending July 3, the latest week for which data is available, were in Puerto Rico, 7.0%; Oregon, 4.9%; Pennsylvania, 4.8%; Alaska, 4.5%; Nevada, 4.5%; and Connecticut, 4.4%.