US Jobless Claims – The number of Americans filing for unemployment benefits, posted an expected decline last week unexpectedly fell last week, falling to its lowest level since December 1969. Analysts were expecting US jobless claims to increase by 5,000 to 220,000 last week. However, for the week ended July 14th, initial claims for state unemployment benefits fell by 8,000 to a seasonally adjusted figure of 207,000.
The Labor Department reported a second consecutive weekly drop in claims However, there is much volatility around this time of year as seasonal employment numbers increase. It is also around this time of year when motor vehicle manufacturers close assembly lines to carry out annual retooling.
Considered a more reliable indicator of the benefits market, the four week moving average also fell. The four week moving average was 220,500, a fall of 2,750 from the week before. The monthly average is regarded as a more accurate indicator of US labor trends as it reduces the volatility found in the week-to-week data.
The continuing US jobless claims figure in the week ended July 7th increased to 1.751 million from the 1.743 million recorded in the previous week. The data came as a surprise as market expectations were for a decline to 1.730 million.
Ian Shepherdson, chief economist at Pantheon Macroeconomics, wrote in a note sent to clients: “Claims are being distorted by seasonal problems caused by the July 4 holiday, and the auto makers’ annual retooling shutdowns, making the numbers even less predictable than usual,”
Employment gains in the US averaged 215,000 jobs every month for the first six months of this year. The labor market is regarded as being close to or at full employment. In May, there were 6.6 million unfilled jobs , a strong sign that US firms are unable to find qualified workers to fill the open positions.