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First Cut: Initial jobless claims in July 6 week fall to lowest level since mid-April

Initial jobless claims fell 13,000 in the July 6 week to 209,000 from 222,000 in the prior week (previously 221,000). This was the lowest level since 193,000 in the April 13 week when the timing of the Easter holiday led to some noise in the data and exceptionally low levels relative to the underlying trend.

In the July 6 week, the four-week moving average was 219,250, down 3,250 from the previous week.  Claims somewhere in the 215,000-225,000 range seem to be representative of present conditions.

 

There were no special factors in the week and no states estimated claims.

The decline is probably due to a strong seasonal adjustment factor that anticipated more claims than actually arrived. Unadjusted claims were up 8,160 to 232,688, a relatively small number at a time when layoff activity is usually higher. This is the time of year when automakers often close factories for retooling, resulting in layoffs at suppliers. However, automakers have been cutting back production in recent months, and the impact is less than normally seen. This situation is likely to persist into next week when the seasonal factors adjust for even higher numbers of layoffs.

Continuing claims rose 27,000 in the June 29 week to 1.723 million. The seasonal adjustment anticipated a decline in unadjusted levels, but these rose 16,704 to 1.605 million from 1.589 million in the prior week.

The insured unemployment rate remained at 1.2% where it has been for over 13 months. Small week-to-week wiggles in the rate (1.200% in the June 29 week after 1.181% in the June 22 week) do not change that little slack remains for the labor market in the historical context.

 

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