US Weekly Jobless Claims 203k Vs 214k Expected

by Ike Obudulu Posted on September 6th, 2018

Washington, D.C., USA : The number of individuals who filed for unemployment insurance for the first time (Initial claims) during the week ended September 1 was a seasonally adjusted 203,000, a decrease of 10,000 from the previous week’s unrevised level of 213,000, the U.S. Department of Labor said Thursday in it’s Unemployment Insurance Weekly Claims Report.

The consensus forecast from economists had expected total new claims of 214000 in the past week.

This is the lowest level for initial claims since December 6, 1969 when it was 202,000.

The 4-week moving average was 209,500, a decrease of 2,750 from the previous week’s unrevised average of 212,250. This is the lowest level for this average since December 6, 1969 when it was 204,500.

On Friday, the Labor Department is scheduled to release its more closely watched report on the employment situation in the month of August.

The report is expected to show employment increased by about 191,000 jobs in August after rising by 157,000 jobs in July. The unemployment rate is expected to dip to 3.8 percent from 3.9 percent.

Seasonally adjusted initial claims data

The advance seasonally adjusted insured unemployment rate was 1.2 percent for the week ending August 25, unchanged from the previous week’s unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending August 25 was 1,707,000, a decrease of 3,000 from the previous week’s revised level. The previous week’s level was revised up 2,000 from 1,708,000 to 1,710,000. The 4-week moving average was 1,718,500, a decrease of 13,250 from the previous week’s revised average. This is the lowest level for this average since December 8, 1973 when it was 1,715,500. The previous week’s average was revised up by 500 from 1,731,250 to 1,731,750.

Unadjusted initial claims data

The advance number of actual initial claims under state programs, unadjusted, totaled 172,355 in the week ending September 1, a decrease of 3,390 (or -1.9 percent) from the previous week. The seasonal factors had expected an increase of 4,687 (or 2.7 percent) from the previous week. There were 250,627 initial claims in the comparable week in 2017.

The advance unadjusted insured unemployment rate was 1.1 percent during the week ending August 25, unchanged from the prior week. The advance unadjusted number for persons claiming UI benefits in state programs totaled 1,596,434, a decrease of 27,788 (or -1.7 percent) from the preceding week. The seasonal factors had expected a decrease of 25,646 (or -1.6 percent) from the previous week. A year earlier the rate was 1.3 percent and the volume was 1,812,487.

The total number of people claiming benefits in all programs for the week ending August 18 was 1,648,724, a decrease of 45,376 from the previous week. There were 1,872,342 persons claiming benefits in all programs in the comparable week in 2017.

No state was triggered “on” the Extended Benefits program during the week ending August 18.

Initial claims for UI benefits filed by former Federal civilian employees totaled 596 in the week ending August 25, a decrease of 36 from the prior week. There were 646 initial claims filed by newly discharged veterans, an increase of 31 from the preceding week.

There were 7,426 former Federal civilian employees claiming UI benefits for the week ending August 18, a decrease of 406 from the previous week. Newly discharged veterans claiming benefits totaled 7,633, an increase of 223 from the prior week.

The highest insured unemployment rates in the week ending August 18 were in New Jersey (2.5), Connecticut (2.2), Pennsylvania (2.0), Puerto Rico (1.9), Rhode Island (1.9), Alaska (1.8), California (1.8), Illinois (1.5), Massachusetts (1.5), and New York (1.5).

The largest increases in initial claims for the week ending August 25 were in New York (+4,853), Michigan (+927), Pennsylvania (+582), Washington (+556), and Oregon (+364), while the largest decreases were in California (-1,432), New Jersey (-905), Georgia (-532), Ohio (-365), and North Carolina (-214).

Why Markets Care About Unemployment Insurance Weekly Claims

Unemployment Insurance Weekly Claims – also called  Jobless Claims or Initial Claims – measures the number of individuals who filed for unemployment insurance for the first time during the past week.

Unemployment Insurance Weekly Claims is the nation’s earliest economic data. The market impact fluctuates from week to week – there tends to be more focus on the release when traders need to diagnose recent developments, or when the reading is at extremes.

The usual effect is that if ‘Actual’ is less than ‘Forecast’, it is good for the dollar and vice versa.

Markets care because although it’s generally viewed as a lagging indicator, the number of unemployed people is an important signal of overall economic health since consumer spending is highly correlated with labor-market conditions. Unemployment is also a major consideration for those steering the country’s monetary policy.

Initial Claims

An initial claim is a claim filed by an unemployed individual after a separation from an employer. The claimant requests a determination of basic eligibility for the UI program. When an initial claim is filed with a state, certain programmatic activities take place and these result in activity counts including the count of initial claims. The count of U.S. initial claims for unemployment insurance is a leading economic indicator because it is an indication of emerging labor market conditions in the country. However, these are weekly administrative data which are difficult to seasonally adjust, making the series subject to some volatility.

Continued Weeks Claimed

A person who has already filed an initial claim and who has experienced a week of unemployment then files a continued claim to claim benefits for that week of unemployment. Continued claims are also referred to as insured unemployment. The count of U.S. continued weeks claimed is also a good indicator of labor market conditions.

Continued claims reflect the current number of insured unemployed workers filing for UI benefits in the nation. While continued claims are not a leading indicator (they roughly coincide with economic cycles at their peaks and lag at cycle troughs), they provide confirming evidence of the direction of the U.S. economy

Seasonal Adjustments and Annual Revisions

Over the course of a year, the weekly changes in the levels of initial claims and continued claims undergo regularly occurring fluctuations. These fluctuations may result from seasonal changes in weather, major holidays, the opening and closing of schools, or other similar events. Because these seasonal events follow a more or less regular pattern each year, their influence on the level of a series can be tempered by adjusting for regular seasonal variation. These adjustments make trend and cycle developments easier to spot. At the beginning of each calendar year, the Bureau of Labor Statistics provides the Employment and Training Administration (ETA) with a set of seasonal factors to apply to the unadjusted data during that year. Concurrent with the implementation and release of the new seasonal factors, ETA incorporates revisions to the UI claims historical series caused by updates to the unadjusted data.

Other Economy News : U.S. Private Sector Job Growth Slows More Than Expected In August

Private sector employment in the U.S. rose by less than expected in the month of August, according to a report released by payroll processor ADP on Thursday.

ADP said private sector employment climbed by 163,000 jobs in August after jumping by a revised 217,000 jobs in July.

Economists had expected an increase of about 190,000 jobs compared to the spike of 219,000 jobs originally reported for the previous month.

“Although we saw a small slowdown in job growth the market remains incredibly dynamic,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute.

She added, “Midsized businesses continue to be the engine of growth, adding nearly 70 percent of all jobs this month, and remain resilient in the current economic climate.”

The report said employment at medium-sized businesses increased by 111,000 jobs in August, while employment at large and small businesses edged up by 31,000 jobs and 21,000 jobs, respectively.

ADP also said employment in the service-providing sector climbed by 139,000 jobs. Employment in the goods-producing sector crept up by 24,000 jobs.

“Employers are aggressively competing to hold onto their existing workers and to find new ones,” said Mark Zandi, chief economist of Moody’s Analytics. “Small businesses are struggling the most in this competition, as they increasingly can’t fill open positions.”

On Friday, the Labor Department is scheduled to release its more closely watched monthly jobs report, which includes both public and private sector jobs.

The report is expected to show employment increased by about 191,000 jobs in August after rising by 157,000 jobs in July. The unemployment rate is expected to dip to 3.8 percent from 3.9 percent.

Author

Ike Obudulu

Ike Obudulu

Versatile Certified Fraud Examiner, Chartered Accountant, Certified Internal Auditor with an MBA in Finance And Investments who has both worked for and consulted with some of the world's largest companies on main street and wall street in over 20 countries, Ike brings his extensive reporting and investigations experience to bear on his role as Chief Editor.
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