Initial Unemployment Claims Filings Fall to Six-Month Low

WASHINGTON -- The number of U.S. workers filing new claims for state jobless benefits began climbing back up last week, confirming that the dramatic declines reported earlier this month weren't necessarily signs of an economic revival. Initial claims for jobless benefits rose by 30,000 to 554,000 on a seasonally adjusted basis in the week ended July 18, the Labor Department said Thursday.

The four-week average of new claims, which aims to smooth volatility in the data, fell by 19,000 to 566,000, the lowest level since Jan. 24. The tally of continuing claims -- those drawn by workers for more than one week -- fell by 88,000 during the week ended July 11 to 6,225,000, the lowest level since April 11.

The good news is that the four-week average of new claims fell to a six-month low (see chart above), so there could be an economic revivial after all.

Comments

[Dave Wrixon:]

So bad is news is good now?

Jul 23 12:46 PM

[The Good Ne...:]

Dave,

No -- a falling 4-week moving average for initial claims is good news. There is no bad in that graph, sorry...

Thanks for the chart Mark.

GNE

Jul 23 02:11 PM

[CLH:]

Yes this is good news. However the best news is the market is up nearly 50% since the March bottom.

Of course most investors are out of the market. We call these investors losers.

Jul 24 01:19 PM

[ciel:]

It is encouraging. After some lengthy indecisiveness, no doubt related to the bankruptcy-related, anomalously early Chrysler and GM closings, the 4wma is now sending a strong signal that technical recession is over, or will be very soon.

The $64,000 question is whether or not the economy starts to really slip later this year, or next. Long and weekly leading indicators suggest that a return to technical recession is unlikely, but those who point out that this has been no ordinary downturn do have a very good point.

Jul 25 08:21 AM

[res ipsa lo...:]

The reality is the changes are not significant yet. The number for Aug 1st has just been revised upward to 588,000. That sure hurts your downward trend. In an age of bountiful immediate gratification for the need for statistics, statistics are less accurate and are often revised and re-revised. Common sense tells us that weekly unemployment stats must be volatile since companies tend to layoff on a quarterly basis--that's when they close the books on activity and plan Furthermore, the drop on Aug 1st was less than 1 percent--which is seven times smaller than the previous weeks upward revision. In other words, given that the drop is 1/7 of the latest previous revision, the statistic is very likely misleading.

Aug 06 10:10 AM