Washington, D.C., USA: The number of individuals who filed for unemployment insurance for the first time (Initial claims) during the week ended July 14 was a seasonally adjusted 207,000 the U.S. Department of Labor said Thursday in it’s Unemployment Insurance Weekly Claims Report, a decrease of 8,000 from the previous week’s revised level.
The forecast from economists had expected total new claims of 226000 in the past week.
This is the lowest level for initial claims since December 6, 1969 when it was 202,000. The previous week’s level was revised up by 1,000 from 214,000 to 215,000. The 4-week moving average was 220,500, a decrease of 2,750 from the previous week’s revised average. The previous week’s average was revised up by 250 from 223,000 to 223,250.
Seasonally adjusted initial claims data
The advance seasonally adjusted insured unemployment rate was 1.2 percent for the week ending July 7, unchanged from the previous week’s unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending July 7 was 1,751,000, an increase of 8,000 from the previous week’s revised level. The previous week’s level was revised up 4,000 from 1,739,000 to 1,743,000. The 4-week moving average was 1,735,750, an increase of 6,250 from the previous week’s revised average. The previous week’s average was revised up by 1,000 from 1,728,500 to 1,729,500.
Unadjusted initial claims data
The advance number of actual initial claims under state programs, unadjusted, totaled 231,347 in the week ending July 14, a decrease of 33,522 (or -12.7 percent) from the previous week. The seasonal factors had expected a decrease of 25,328 (or -9.6 percent) from the previous week. There were 257,763 initial claims in the comparable week in 2017.
The advance unadjusted insured unemployment rate was 1.2 percent during the week ending July 7, unchanged from the prior week. The advance unadjusted number for persons claiming UI benefits in state programs totaled 1,770,375, an increase of 133,591 (or 8.2 percent) from the preceding week. The seasonal factors had expected an increase of 125,504 (or 7.7 percent) from the previous week. A year earlier the rate was 1.4 percent and the volume was 1,996,804.
The total number of people claiming benefits in all programs for the week ending June 30 was 1,661,357, a decrease of 10,873 from the previous week. There were 1,872,066 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 June 30.
Initial claims for UI benefits filed by former Federal civilian employees totaled 844 in the week ending July 7, an increase of 211 from the prior week. There were 632 initial claims filed by newly discharged veterans, a decrease of 30 from the preceding week.
There were 6,889 former Federal civilian employees claiming UI benefits for the week ending June 30, a decrease of 558 from the previous week. Newly discharged veterans claiming benefits totaled 7,264, a decrease of 309 from the prior week.
The highest insured unemployment rates in the week ending June 30 were in New Jersey (2.2), Connecticut (2.1), Puerto Rico (2.1), the Virgin Islands (2.1), Alaska (2.0), Pennsylvania (2.0), Rhode Island (1.9), California (1.8), Illinois (1.5), and New York (1.5).
The largest increases in initial claims for the week ending July 7 were in New York (+15,130), Michigan (+9,274), Ohio (+3,038), Iowa (+2,310), and Pennsylvania (+2,004), while the largest decreases were in California (-5,387), New Jersey (-3,524), Massachusetts (-2,510), Connecticut (-2,011), and Kentucky (-1,598).
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.
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 – Trump “Not Thrilled” With Fed Raising Interest Rates
Breaking with longstanding precedent, President Donald Trump offered criticism of the Federal Reserve’s current policy of gradually raising interest rates. Trump said in an excerpt of a TV interview that he is “not thrilled” with rate hikes by the Fed.
“I’m not thrilled. Because we go up and every time you go up they want to raise rates again. I don’t really — I am not happy about it.”
At the same time, Trump noted he is letting the Fed do “what they feel is best,” and a subsequent statement from the White House said the president respects the independence of the central bank.
“As he said he considers the Federal Reserve Board Chair Jerome Powell a very good man and that he is not interfering with Fed policy decisions,” the statement said.
The White House added, “The President’s views on interest rates are well known and his comments today are a reiteration of those long held positions, and public comments.”
Trump appeared to acknowledge in the interview that sitting presidents have rarely criticized the Fed but said he “couldn’t care less what they say, because my views haven’t changed.”
The Fed is scheduled to hold a two-day meeting policy meeting on July 31st and August 1st, with the central bank widely expected to leave interest rates unchanged.
After raising rates twice this year to the current range of 1.75 to 2 percent, the Fed has signaled two more rate hikes before the end of the year.