After three weeks of dramatic improvement, initial filings for jobless claims rose in the week ending July 18. In line with predictions, 554,000 people filed for first-time unemployment benefits in the week, a 30k increase from the prior week.
This marks the third week that claims have remained below the 600k level, but economists are cautious in speaking about any tangible improvement in the labor market, as the apparent reduction in claims could be due solely to seasonal adjustment issues.
“Were it not for the distortions resulting from the timing of auto shutdowns, this decline in claims would be the clearest signal yet that the recession ended sometime during the second quarter,” said Conrad DeQuadros from RDQ, who said several more weeks was needed to see clearly through the distortion.
Meanwhile, following up on a record weekly slide in the prior week, Continuing Claims fell 88k in the week ending July 11, putting the total number of people receiving benefits to 6.225 million.
As with the reduction in initial claims, analysts are skeptical about there being any signals in those figures.
“The reduction should not be looked at as a sign of massively improving conditions in the U.S. labor market,” said TD strategist Ian Pollick. “Rather, the seasonal factors coupled with people losing their benefits pushed down the seasonally adjusted level of continuing claims.”
Just after the release, the euro continued rallying against the dollar, rising as high as $1.4232 within minutes of the release.
Half an hour before the opening bell, equity futures are looking up with futures on the Dow trading higher by around 36 points.