1st Time Unemployment Claims Resume Decline, But Exansion Sputters

By Mark Lieberman

Managing Director and Senior Economist

Highlights

  • There were 213,000 1st time claims for unemployment insurance for the week ended Aug 4 a DECREASE of 6.000 from the prior week’s upwardly revised report (from 218,000 to 219,000)
  • The four-week moving average of first-time claims DROPPED 500 to 214,250;
  • Four-week moving average represented 0.137 percent of employment, DOWN from 0.138 the previous week;
  • The number of continued claims – individuals who have been collecting unemployment insurance — reported on a one-week lag, was 1,755,000 for the week ended July 28, UP 29,000 from the previous week’s UPWARDLY REVISED 1,726,000 (revised from 1,724,000);
  • The four-week moving average of continued claims ROSE 3,000 to 1,745,250.

Trends:

  • Four-week moving average of initial claims fell for the fifth week in a row for the first time since last November;
  • The four-week moving average of first-time claims has declined year-year for 43 straight weeks;
  • After falling for 11 straight weeks (from April to mid-June) the four-week moving average of continued claims has not increased in four of the last five weeks.

Data Source: Department of Labor

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On the heels of a meh JOLTS (Job Openings and Labor Turnover Survey) Tuesday, the Department of Labor Thursday reported a drop in the number of first-time claims for the week ended last Saturday.

While the two reports don’t necessarily feed into each other, they are related in that one of the surest ways to get off the unemployment rolls (as reported in the continued claims report) is to get a job. According to the JOLTS data, the number of job openings barely budged in June (the most recent reporting month) up just 3,000 to 6,662,000. Also, in June, the number of hires dropped 96,000 to 5,651,000.

The slowdown in hiring is one explanation as to why the number of continued claims – measuring those who are still collecting unemployment benefits – rose in the last week and why the four-week moving average of continued claims rose as well.

According to the JOLTS data, the number of unemployed per job opening rose in June in six occupational sectors: professional and business services, construction, trade, education and health services, transportation and leisure and hospitality.

The number of layoffs in the construction sector, one of the country’s core occupational sectors, rose in June as the number of hires fell.

The JOLTS data taken with the initial claims reports suggest a slowing in the labor market which will only exacerbate the stagnant wages environment plaguing the labor market, suggesting the 4.1 percent GDP growth of the second quarter might have been an aberration and not the new norm for the nation’s economy.

You can hear Mark Lieberman every Friday at 6:20 am on the Morning Briefing on P.O.T.U.S. radio @sxmpotus, Sirius-XM 124.

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