US Weekly Jobless Claims 213k Vs 214k Expected

by Ike Obudulu Posted on August 30th, 2018

Washington, D.C., USA : The number of individuals who filed for unemployment insurance for the first time (Initial claims) during the week ended August 25 was a seasonally adjusted 213,000, an increase of 3,000 from the previous week’s unrevised level of 210,000, 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 this average since December 13, 1969 when it was 210,750.

Seasonally adjusted initial claims data

The advance seasonally adjusted insured unemployment rate was 1.2 percent for the week ending August 18, unchanged from the previous week’s unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending August 18 was 1,708,000, a decrease of 20,000 from the previous week’s revised level. The previous week’s level was revised up 1,000 from 1,727,000 to 1,728,000. The 4-week moving average was 1,731,250, a decrease of 4,500 from the previous week’s revised average. The previous week’s average was revised up by 250 from 1,735,500 to 1,735,750.

Unadjusted initial claims data

The advance number of actual initial claims under state programs, unadjusted, totaled 175,421 in the week ending August 25, an increase of 2,090 (or 1.2 percent) from the previous week. The seasonal factors had expected no change in the unadjusted data from the previous week. There were 196,227 initial claims in the comparable week in 2017.

The advance unadjusted insured unemployment rate was 1.1 percent during the week ending August 18, a decrease of 0.1 percentage point from the prior week. The advance unadjusted number for persons claiming UI benefits in state programs totaled 1,622,571, a decrease of 46,269 (or -2.8 percent) from the preceding week. The seasonal factors had expected a decrease of 27,641 (or -1.7 percent) from the previous week. A year earlier the rate was 1.3 percent and the volume was 1,841,596.

The total number of people claiming benefits in all programs for the week ending August 11 was 1,694,100, a decrease of 9,655 from the previous week. There were 1,916,598 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 11.
Initial claims for UI benefits filed by former Federal civilian employees totaled 632 in the week ending August 18, a decrease of 53 from the prior week. There were 615 initial claims filed by newly discharged veterans, a decrease of 36 from the preceding week.

There were 7,832 former Federal civilian employees claiming UI benefits for the week ending August 11, an increase of 85 from the previous week. Newly discharged veterans claiming benefits totaled 7,410, a decrease of 210 from the prior week.

The highest insured unemployment rates in the week ending August 11 were in New Jersey (2.5), Connecticut (2.2), Pennsylvania (2.1), Puerto Rico (2.1), California (1.9), Rhode Island (1.9), Alaska (1.8), Massachusetts (1.6), the District of Columbia (1.5), Illinois (1.5), New York (1.5), and the Virgin Islands (1.5).

The largest increases in initial claims for the week ending August 18 were in California (+545), New Jersey (+465), Arkansas (+180), North Carolina (+127), and Missouri (+108), while the largest decreases were in Pennsylvania (-965), Georgia (-950), Michigan (-511), South Carolina (-501), and Illinois (-481).

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. Consumer Spending, Inflation Rose in July, Incomes Cooled

U.S consumer spending extended gains into July and inflation rose to a six-year high, reflecting economic strength that should keep Federal Reserve policy makers on track to keep gradually raising interest rates.

Purchases, which account for about 70 percent of the economy, rose 0.4 percent from the prior month for the second straight time, matching economists’ estimates, Commerce Department figures showed Thursday. Incomes advanced 0.3 percent, less than projected. The Federal Reserve’s preferred measure of inflation ticked up, as forecast, to a 2.3 percent annual gain, the most since 2012.

The first third-quarter readings for some of the broadest gauges of the world’s largest economy show consumers are continuing to drive growth while reinforcing that inflation is about where Fed policy makers want it. A key measure of underlying inflation hit 2 percent, matching the Fed’s goal for overall price gains, as central bankers pencil in boosting borrowing costs two moretimes this year, with one of those quarter-point hikes expected in September.

The spending gain reflected increases in outlays on prescription drugs as well as food services and accommodations, according to the report. Previously-released figures on retail sales had showed large advances in restaurant receipts.

A separate Labor Department report Thursday showed filings for unemployment benefits last week remained near the lowest level in almost five decades, indicating employers are still reluctant to fire workers. Initial jobless claims rose 3,000 to 213,000, compared with the median estimate of analysts for 212,000.

Price measures were in line with analyst estimates. The Fed’s preferred inflation gauge — tied to consumption — rose 0.1 percent from the previous month. Some Fed officials have indicated that they’re comfortable with annual inflation exceeding their target a bit, given that price gains were below their goal for most of the past six years.

Excluding food and energy, so-called core prices rose 0.2 percent from the prior month. The core index, seen as a more reliable gauge of underlying inflation, was up 2 percent from July 2017, after a 1.9 percent increase in June.

Highlighting the effects of rising prices, inflation-adjusted spending rose 0.2 percent from the prior month, the slowest pace since a decline in February.

Wages and salaries rose 0.4 percent for a second month, the July report showed. Disposable income, or earnings adjusted for taxes and inflation, advanced 0.2 percent after a 0.3 percent gain.

Paychecks have been slow to show sustained progress even with robust hiring and an unemployment rate hovering near the lowest since 1969. While lower taxes are helping consumers, the pickup in inflation is acting as a hurdle.

In the second quarter, the economy expanded at a 4.2 percent annualized rate, the fastest since 2014, with consumption rebounding to a 3.8 percent pace, according to revised data released Wednesday. President Donald Trump has claimed credit for the pickup in growth, with his administration targeting 3 percent annual expansion.

Thursday’s report also showed the saving rate fell to 6.7 percent, the lowest since December, from 6.8 percent the prior month. Comprehensive revisions issued in July revealed Americans putting away more money in recent years than had been earlier thought.

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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