The number of Americans filing for first-time unemployment benefits rose less than expected in the week ended August 3, according to a weekly report from the Labor Department, to remain close to five-year lows and keep speculation alive about the Federal Reserve tapering its third version of quantitative easing.
Last week, initial jobless claims rose by 5,000 to 333,000 from the prior week’s revised figure of 328,000 (up from an originally estimated 326,000). In the week ended July 27, the number of claims hit the lowest level since January 2008.
Economists were expecting a slightly higher rise in claims for last week, forecasting claims at 338,000.
The four-week moving average, a less volatile barometer of labor trends because it irons out weekly volatility, dropped by 6,250 to 335,500, marking the lowest level since November 2007. Generally speaking, economists consider claims at 350,000 per week to indicated modest growth in the jobs market.
July is known to be a volatile month because of the Independence Day holiday and auto factories shutting down for maintenance, but with that month now behind us, economists start paying even closer attention to new unemployment filings, especially as to how it can relate to the Fed starting to unwind QE3. On Wednesday, Sandra Pianalto, president of the Cleveland Federal Reserve Bank, reiterated the sentiment of many in saying that the Fed could start scaling back its asset purchases as long as the labor market holds its recent gains. Pianalto did not offer a timeframe, but Thursday’s report lends some credence to the strengthening jobs market.
Continuing claims, or people that are already receiving unemployment benefits, increased by 67,000 to a seasonally adjusted 3.02 million in the week ended July 27. Analysts were pegging a slight decline to 2.95 million. Continuing claims are reported at a one-week lag to initial claims and do not include people receiving extended benefits under Federal programs.
The total number of Americans collecting benefits in all programs for the week ended July 20 decreased by 174,418 to 4.52 million. Total claims are reported at a two-week lag. Compared to the same time in 2012, total claims were down 21 percent from 5.75 million.
The largest increases in initial claims for the week ending July 27 were in Idaho (+264), Wisconsin (+179), and South Dakota (+115). 12 states reported declines, with the largest decreases in California (-21,479), Michigan (-8,647) and Missouri (-3,208).
The slightly better-than-expected report is helping keep futures in the green ahead of the opening bell. Dow futures are up 58 points, S&P 500 futures are ahead 6 points and Nasdaq futures are up by 14 points. Equities have been beaten-up this week so far with the blue chip indexes all down about 1 percent or more.