Jobless Claims Rise 34,000 to 386,000 in Week Ended July 14

WASHINGTON - Initial claims for U.S. state unemployment benefits rose by 34,000 to 386,000 in the July 14 employment survey week, more than reversing the previous week's decline as seasonal adjustment volatility continued, the Labor Department reported Thursday.

The level of claims was still down 6,000 from the 392,000 level in the June 16 employment survey week.

The median estimate of economists surveyed by MNI was for 365,000, a rise of 15,000 from the initially reported 350,000 level in the July 7 week. That week's claims level was revised up slightly to 352,000.

A Labor Department analyst said the timing of auto retooling shutdowns, which has been different than seasonal adjustment factors expect, continued to impact the level of adjusted claims.

Auto retooling shut-downs were typically concentrated at the beginning of July in past years, but in more recent times have not stuck strictly to that schedule. As a result, some seasonal adjustment difficulty is likely in the coming weeks and the 4-week moving average could be a better diagnostic measure.

The analyst said seasonal factors had expected a decline of about 6.8%, or 29,878, in unadjusted initial claims in the week following the sharp increase that it expected in the first week of July.

Unadjusted claims actually rose less than expected in the July 7 week, which would usually lead to a smaller-than-expected decline in unadjusted claims in the July 14 week, and as a result a rise in seasonally adjusted claims.

Instead, unadjusted claims actually rose further in the July 14 week, up 2.4%, or 10,768 claims, to a level of 452,960. The result was an even larger jump in seasonally adjusted claims than economists had forecast. Unadjusted claims were at a level of 470,086 in the comparable week a year ago.

The initial claims seasonally adjusted 4-week moving average fell for the fourth straight week, down 1,500 to 375,500 in the July 14 week. This was the lowest level since the May 19 week and down 12,000 from the level in the June 16 employment survey week.

The state data released for the July 7 week indicated unadjusted initial claims increased in 44 states and declined in 9 states, with no states unchanged. The District of Columbia, Puerto Rico, and Virgin Islands are included in this data.

Continuing claims came in at 3.314 million after seasonal adjustment in the July 7 week, up only 1,000 after a decrease of 5,000 in the previous week.

Unadjusted continuing claims were up 246,164 to 3,356,765 million in the July 7 week, but were still below the 3,783,316 million level in the comparable week a year ago.

The seasonally adjusted insured unemployment rate held steady at 2.6% for the 17th straight week in the July 7 week, still down from the 3.0% rate in the comparable week a year earlier.

The unemployment rate among the insured labor force is well below that reported monthly by the Labor Department because claims are approved for the most part only for job losers, not the job leavers and labor force reentrants included in the monthly report.

The Labor Department said that the level of unadjusted Emergency Unemployment Compensation benefits claims fell by 81,924 in the June 30 week, bringing that category total to 2,524,363. Extended benefits claims fell by 2,684 to 41,108 not seasonally adjusted in the same week.

The Labor Department reported that a total of 5,752,116 persons claimed unemployment benefits in the June 30 week, a drop of 121,985 from the previous week and still well below the 7,323,008 persons in the comparable week a year ago. These data are not seasonally adjusted, and include regular state claims, federal employee claims, new veterans claims, the EUC and extended benefits programs, state additional benefits, and STC/Workshare claims.

Market News International is a real-time global news service for fixed-income and foreign exchange market professionals. See www.marketnews.com.

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