Markets were hoping that new claims for unemployment insurance would hold steady or even see modest improvement to the 550k level, but job losses just aren’t letting up as summer comes to a close.
First-time claims for jobless benefits increased for the second straight week, moving up by 15k last week to 576,000, and the prior week’s figures were revised up by a few thousand to 561,000. Any number higher than 360k indicates the labor market is bleeding, so the figures suggest that companies continue slash payrolls rapidly to cut costs.
The report was bad on both fronts, as the number of people continuing to receive jobless benefits increased by 2,000 to 6.241 million for the week ending August 8. The record high of 6.904 million was seen in late June.
“The painful job losses continue, but ― and I know this is not comforting ― the rate of losses is still nowhere near what we saw earlier this year,” noted economist Jennifer Lee from BMO Capital Markets. “At 576k, the number of claimants is well below the recent peak in January of 674k.”
This week’s report has added significance as it is the survey week for the monthly employment numbers. Improvement would have indicated that payrolls would be better this month, but instead, the current 4-week average of 570k is actually worse than the 567k average in July’s survey week.
Looking ahead, Lee added, “The pace of job losses has improved from what we saw earlier this year but it still looks like the U.S. economy shed another 300k jobs or so this month.”