More Americans than expected filed for first time jobless benefits last week, according to the weekly report from the Labor Department Thursday morning, lending a bit more data to confuse guesses as to when the Federal Reserve will slow its massive asset purchases each month even though claims still sit near five-year lows.
For the week ended August 17, initial jobless claims rose to an estimated 336,000 from a revised 323,000 the week prior. The number of claims for the week ended August 10 was originally estimated at 320,000. The prior week’s number was the lowest number of weekly claims since October 2007.
Economists were expected a rise, but only to 329,000.
The four-week moving average, regarded as a better gauge of labor trends because it irons out weekly volatility, was down 2,250 from the week prior’s modestly revised figure to 330,500. Economists regard 350,000 in weekly claims as representative as modest growth in the jobs market.
Continuing claims, or those people that are already collecting benefits in state programs, rose by 29,000 to 2.999 million in the week ended August 10. Continuing claims are reported at a one-week lag to initial claims.
The total number of Americans collecting benefits in all state and federal programs in the week ended August 3 was 4.438 million, down 148,207 from the week earlier. Total claims are reported at a two-week lag. At the same time in 2012, there were 5.594 million people collecting benefits.
In a wider comparison, when monetary stimulus was started by the Federal Reserve in early 2009, jobless claims were topping 650,000 each week. Results each week now are holding around levels from throughout 2007.
The largest increases in initial claims last week were in South Carolina (+907), New York (+762) and Oregon (+685). The largest decreases were in California (-4,105), Ohio (-1,554) and Texas (-894).
Weekly jobless claims volatility can provide a catalyst for markets to react, but futures are holding in positive territory this morning despite more claims than anticipated. In Wednesday trading, stocks bounced all over the place subsequent to minutes from the latest Fed meeting. The minutes revealed that there is not much resistance to the Fed beginning to slow its stimulus purchases of $85 billion each month in Treasuries and mortgage-backed securities before the end of the year. Many economists have speculated that tapering will begin in September, but the Fed neither confirmed nor denied that date in the minutes.
