The weekly labor report was mixed, with the main story still being that there are no signs of job creation as the recession comes to a close. First-time jobless claims in the first week of August came in at 558k, and the prior week’s 550k print was revised up to 557k.
In other words, the past two weeks have seen over one million Americans file for unemployment benefits, and the trend, while not as bad as the first several months of the year, isn’t improving on a weekly basis.
Continuing claims, or the number of people continuing to receive jobless benefits, fell by 141k in the week ending August 1 to 6.20 million. That would be fantastic news if those people were off the dole because they found work, but more probably is the opposite story: continuing benefits are expiring, leaving the unemployed to hope they can receive emergency benefits.
“Taken together, this report is still quite soft as initial claims rose during the week and the decline seen in continuing claims likely does not reflect any semblance of real job creation,” commented Ian Pollick from TD Securities. “We know the U.S. labor market continues to move in slow-motion, and to that end we would interpret this report as another weak claims report.”
However, JP Morgan economist Abiel Reinhart said a slight advance in the jobless claims number wouldn’t have "anything to do with our belief on the fundamentals of the labor market." Writing a day before the release, he said an increase could take place as "sometimes when you have large swings in one direction in the claims series, you sometimes get a little bit of a reversal the next week.”