Jobless Claims Rise 25k, Continuing Claims Decline
Just as expected by the median forecast, jobless claims rose to 584k in the week ending July 25, as seasonal factors owing to the auto shutdowns earlier in the year were less of a factor.
“All of those 'benefits' from the seasonal factor adjustments to U.S. initial claims over the past few weeks are in full reversal mode,” said Jennifer Lee from BMO Capital Markets just after the release. “The reversal, along with the reasons behind it, have been widely broadcast for a while now, so it does not come as any surprise, but it doesn't soften the blow of the headline.”
The 584k figure is 25k above the previous week, representing the highest number of claims after 3 weeks of improvement.
Continuing claims, the total number of people still receiving benefits, dropped 54k to 6.197 million in the week ending July 18, marking the third week of decreases. However, that “improvement” is likely more a reflection of the unemployed no longer receiving benefits rather than an indication of job creation.
TD strategist Millan Mulraine said the report was a mixed bag. “We knew that initial claims had some synthetic momentum behind its recent improvement (due to seasonal factors), while at the same time the improvement in continuing claims can be attributed to people falling off the dole,” he said.
Looking ahead to the nonfarm payrolls employment report for July, Lee said BMO continues to expect the economy to have shed 300k jobs in the month, following a loss of 467k in June.
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