With noise in the claims data, average the weeks out

Initial Jobless Claims totaled 464k, 19k above expectations and up from a revised 427k last week. The distortion of the seasonal auto shutdowns that didn’t happen at GM combined with the July 4th holiday has made the initial claims portion of the data too cloudy to analyze week to week and we thus should average the prior couple of weeks. The 4 week average is 456k, just shy of the lowest since late May but still remains very elevated for an economy that is this far into a recovery. Continuing Claims fell a sharp 223k but comes after rising 276k in the week prior. Extended Benefits fell a net 368k after a fall of 278k in the week prior and 345k the week before. This sharp drop has been more due to people falling off the rolls because of the expiration of benefits. With the extension likely to be reinstated up to 99 weeks, this trend should reverse as the labor market still remains lackluster.

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