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First Cut: Initial jobless claims highest since early May in June 22 week

Initial jobless claims rose 10,000 to 227,000 in the June 22 week. The increase was above expectations and the highest since 228,000 in the May 4 week. The rise is probably not more than normal week-to-week variation and could also reflect some recent announcements of store closings in the retail sector. In any case, the underlying trend as seen in the four-week moving average of 221,250 in the June 22 week points to some modest upward movement in claims in recent weeks, but still consistent with a solid labor market.

There were no special factors reported by the Labor Department and one state — California — estimated claims in the week. It had an unadjusted increase of 5,155 to 43,908.

Claims levels are likely to get noisy soon. It is approaching the period when auto manufacturers normally close factories for annual retooling in preparation for the coming model year. However, slower production earlier this year may mean that some of it has already been accomplished and shutdowns could be shorter and less widespread.

Continuing claims were up 22,000 to 1.688 million in the June 15 week, also well within the normal behavior with levels still modest by historical standards. The insured rate of unemployment lingered at 1.2% for another week and has been there approaching a 14th month.

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