Washington, D.C., USA: The number of individuals who filed for unemployment insurance for the first time (Initial claims) during the week ended June 30 was a seasonally adjusted 231,000 the U.S. Department of Labor said Thursday in it’s Unemployment Insurance Weekly Claims Report. This is an increase of 3,000 from the previous week’s level which was revised up by 1,000 from 227,000 to 228,000.
The forecast from economists had expected total new claims of 225000 in the past week.
The 4-week moving average was 224,500, an increase of 2,250 from the previous week’s revised average. The previous week’s average was revised up by 250 from 222,000 to 222,250.
Private-sector employers added 177,000 jobs in June, Automatic Data Processing Inc. also reported Thursday. That also fell short of the forecast from economists, who had expected on average an increase of 190,000. May’s gain was upwardly revised to show 189,000 growth instead of a previously estimated 178,000.
Seasonally adjusted initial claims data
In the week ending June 30, the advance figure for seasonally adjusted initial claims was 231,000, an increase of 3,000 from the previous week’s revised level. The previous week’s level was revised up by 1,000 from 227,000 to 228,000. The 4-week moving average was 224,500, an increase of 2,250 from the previous week’s revised average. The previous week’s average was revised up by 250 from 222,000 to 222,250.
The advance seasonally adjusted insured unemployment rate was 1.2 percent for the week ending June 23, unchanged from the previous week’s unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending June 23 was 1,739,000, an increase of 32,000 from the previous week’s revised level. The previous week’s level was revised up 2,000 from 1,705,000 to 1,707,000. The 4-week moving average was 1,718,250, a decrease of 1,750 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 1,719,500 to 1,720,000.
Unadjusted initial claims data
The advance number of actual initial claims under state programs, unadjusted, totaled 231,072 in the week ending June 30, an increase of 8,306 (or 3.7 percent) from the previous week. The seasonal factors had expected an increase of 4,778 (or 2.1 percent) from the previous week. There were 252,886 initial claims in the comparable week in 2017.
The advance unadjusted insured unemployment rate was 1.2 percent during the week ending June 23, an increase of 0.1 percentage point from the prior week. The advance unadjusted number for persons claiming UI benefits in state programs totaled 1,643,174, an increase of 57,195 (or 3.6 percent) from the preceding week. The seasonal factors had expected an increase of 27,315 (or 1.7 percent) from the previous week. A year earlier the rate was 1.3 percent and the volume was 1,867,478.
The total number of people claiming benefits in all programs for the week ending June 16 was 1,611,767, a decrease of 2,640 from the previous week. There were 1,844,632 persons claiming benefits in all programs in the comparable week in 2017.
Extended Benefits were payable in the Virgin Islands during the week ending June 16.
Initial claims for UI benefits filed by former Federal civilian employees totaled 606 in the week ending June 23, a decrease of 33 from the prior week. There were 571 initial claims filed by newly discharged veterans, a decrease of 68 from the preceding week.
There were 6,936 former Federal civilian employees claiming UI benefits for the week ending June 16, a decrease of 383 from the previous week. Newly discharged veterans claiming benefits totaled 7,556, a decrease of 31 from the prior week.
The highest insured unemployment rates in the week ending June 16 were in the Virgin Islands (2.7), Alaska (2.2), Puerto Rico (2.1), New Jersey (2.0), California (1.8), Connecticut (1.8), Pennsylvania (1.8), Illinois (1.6), Nevada (1.4), and Rhode Island (1.4).
The largest increases in initial claims for the week ending June 23 were in New Jersey (+5,436), California (+5,420), Maryland (+2,763), Kentucky (+1,968), and New York (+1,897), while the largest decreases were in Pennsylvania (-1,672), Puerto Rico (-1,234), Wisconsin (-899), Texas (-693), and Ohio (-669).
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.