Jobless claims trending lower, but new coronavirus cases may lead to spike

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Initial jobless claims continued to track lower in the week ended July 4, although still at much higher levels than before the coronavirus pandemic shut a large part of the economy.

Claims fell to a seasonally adjusted 1.314 million in the week ended July 4, from the previous week’s downwardly revised level of 1.413 million, originally reported as 1.427 million, the Labor Department said Thursday.

Economists polled by IFR Markets projected 1.375 million claims in the week.

Continuing claims fell to 18.062 million in the week ending June 27 from a downwardly revised 18.760 million, first reported as 19.290 million, a week earlier.

"Signs of modest improvement are seen in both in new and continuing unemployment claims, which were on the decline during the holiday-shortened week,” said senior economic analyst Mark Hamrick. “New claims have dropped for 14 straight weeks despite the uneven nature of COVID-19 restrictions and the outbreak itself."

But, he noted, "the economy remains at significant risk in the weeks and months ahead,” with bankruptcies and retail job losses expected.

Despite the continuing decline in claims, Hamrick noted, they "have remained extremely elevated" and are still above a million a week, "indicating that less momentum is being seen to the downside."

The largest increases in claims for the week ended June 27 came from Michigan (18,668), Indiana (15,496), Texas (7,046), Virginia (6,662), and Kentucky (5,794), while the largest decreases came from Oklahoma (40,208), Florida (11,313), Maryland (9,926), Georgia (8,240), and California (7,132).

"As the COVID-19 outbreak has recently intensified in some states, hopes for an accelerated, sustained and successful reopening of the economy have hit roadblocks,” he said. “This raises concern about the economy’s rebound."

Ed Moya, senior market analyst at OANDA said while the jobless claims report showed everything is “heading in the right direction,” the situation is still “bleak.”

“Initial jobless claims [for the] 16th straight time [were] above the 1 million mark and continuing claims dropped, but are still at an eye-dropping 18 million level,” Moya said. “The recent wave of new coronavirus cases is not yet impacting the labor market and many investors are breathing a temporary sigh of relief.”

Wholesale trade
Wholesalers sales rose 5.4% in May, after a 16.4% drop in April, the Commerce Department reported Thursday.

The April number was originally reported as a 16.9% decline. Year-over-year sales fell 16.2%.

Wholesale inventories fell 1.2% in the month, after a 0.2% rise in April, initially reported as a 1.2% drop.

Economists anticipated a 1.2% decrease.

Year-over-year, inventories slumped 4.2% in May.

Realtors are optimistic
Realtors believe the housing market is recovering, with 92% of respondents claiming buyers have returned, or in some cases, never left the market, the National Association of Realtors said Thursday.

Small, rural area realtors were the ones saying buyers continued looking during the height of the coronavirus pandemic.

“The residential market has seen a swift rebound of activity as numerous states have begun to ease mandatory stay-at-home orders,” according to NAR Chief Economist Lawrence Yun. “Many potential buyers and home sellers were kept at bay in the initial stages of the coronavirus outbreak, but realtors nationwide were able to quickly pivot, embracing technology and business practices to ensure the home buying process continued in a safe manner.”

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Economic indicators Jobless claims Housing Coronavirus