Continued Claims Average Up 10th Straight Week;

By Mark Lieberman

Managing Director and Senior Economist

Highlights

  • There were 244,000 1st time claims for unemployment insurance for the week ended August 5, 3,000 more than the previous week;
  • The number of initial claims for the week ended July 29 was REVISED UP 1,000 to 241,000;
  • The four-week moving average of first time claims FELL 1,000 to 241,000 or 0.157 percent of total employment;
  • The number of continued claims – reported on a one-week lag – for the week ended July 29 was 1,951,000, 16,000 lower than the previous week;
  • The four-week moving average of continuing claims ROSE 500 to 1,965.000.

Image result for unemployment claims

There’s a certain persistence to the numbers in the Labor Department’s weekly report on initial and continued claims for unemployment insurance: the four week moving average of continued claims, doggedly keeps going up, increasing for the 10th straight week for the week ended July 29., fell slightly but remained at a relatively high level according to the Labor Department,

The average for continued claims rose even as the actual number of continued claims dropped but, as a harbinger, new claims for unemployment insurance rose as they have seven time in the last 12 weeks with weekly increases ranging from 2,000 to 20,000 (the last an anachronistic increase due to United Auto Workers members being furloughed as auto plants retooled for the new model year).

The steady increase in the continued claims average says something about slower hiring even as the number of payroll jobs rises. But the slow upward claim of continued claims – and the message — may be consistent with the increase in the number of job openings as reported earlier this week by the Bureau of Labor Statistics in the Job Openings and Labor Turnover Survey (JOLTS) reports. Those openings, in the face of more people remaining unemployed say something –not positive – about the labor market.

Ironically, the Federal Reserve earlier this week announced plans to discontinue its own measure of labor conditions – its Labor Market Conditions Index. The index is derived from 19 labor market indicators, designed to gauge the strength of the jobs market. The index includes the unemployment rate and private payrolls as well as the labor-force participation rate and data on wages, hiring and dismissals. The index was released on the first business day after the Labor Department issues its jobs report. A reading above 0.0 indicates improving labor market activity, below indicates deteriorating activity. The last release, in July showed the index at 1.5, down from 3.3 in June.

The Fed said it decided to stop updating the LMCI “because we believe it no longer provides a good summary of changes in U.S. labor market conditions” but the “measurement of some indicators in recent years changed in ways that significantly degraded“ the index.The Fed said also including average hourly earnings as an indicator did not provide a meaningful link between labor market conditions and wage growth.

The loss of one more statistical measure shouldn’t slow down commentary on labor conditions.

That said, the higher level of initial claims without any special factors has a psychological impact which could affect consumer confidence.

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. You can follow him on Twitter at @foxeconomics.

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