July 29, 2010
Initial jobless claims for the week ending July 24 fell to 457k people from an upwardly revised 468k in the previous week. Consensus forecasts were at 460,000 people filing for the first time for unemployment benefits. Initial claims have mostly hovered between 450k and 475k since the end of last year. The 4-week moving average for initial claims inched down from 457k for the week ending July 17 to 453k for the week ending July 24. Despite the decline, the average is still associated with further job losses as has been the case in prior recessions as opposed to an average of 400k that coincides more with job creation.
In addition, Continuing Claims continues to be volatile for the week ending July 17 as claims increased 81k to 4.565 million. This week’s figure comes after week’s significant decline of more than 200k to 4.485 million. Despite the recent spike, claims should continue its downward trend over the intermediate term as people exhaust their government benefits and despite last week’s bill.
Next week, the market will hopefully gain more clarity on the health of the U.S. economy as Non Farm Payrolls highlights a string of important economic data. Claims data plays a significant role in forecasting payrolls and the unemployment numbers. As of today, economists are expecting Non-farm Payrolls to decline 95k, as government census workers wrap up their employment. More importantly, Private Sector Payrolls is expected to increase by 110k. Last month, companies added only 83k people to the workforce. Finally, the Unemployment Rate is expected to tick up to 9.6 percent from 9.5 percent set in June.
Posted by Rom on 