Ricardo Howard
Weekly jobless claims fell to 215,000 for the week ending July 4, the Labor Department reported Thursday, a drop of 2,000 from the prior week's upwardly revised figure of 217,000. The print landed below every major forecast on the street, with FactSet looking for 220,000, the Wall Street Journal survey pegged at 218,000, and Bloomberg's economist panel calling for 217,000. The undershoot, modest as it is, extends a run of readings that have stayed inside a narrow band for months and continues to frustrate anyone looking for a clean signal of labor market deterioration.
The four week moving average, which smooths out the week to week noise inherent in this series, slid to 218,750, a decline of 3,750. That average has become the more useful number for tracking trend, since single week prints can swing on seasonal adjustment quirks or state level reporting anomalies. Continuing claims, which lag initial claims by a week, ticked up to 1.81 million for the week ending June 27, an increase of 8,000. Even with that gain, the level remains low by historical standards, meaning workers who lose jobs are still finding their way off unemployment rolls relatively quickly.
What the Unadjusted Numbers Reveal
Strip out the seasonal adjustment and the picture shifts slightly. Unadjusted initial claims rose by roughly 10,000 on the week, according to Bloomberg data, with California responsible for nearly the entire increase. Comparing to a year ago sharpens the context: the unadjusted total for the same week last year was 241,361, meaningfully higher than this year's raw figure. That year over year comparison suggests the underlying churn in the labor market has not worsened on a comparable basis, even as isolated state level swings introduce short term noise into the adjusted headline number.
Reading Weekly Jobless Claims Against a Weak Jobs Report
The claims data landed just after a disappointing June nonfarm payrolls report, in which employers added only 57,000 jobs against expectations of 115,000, a shortfall of more than half. The unemployment rate actually dipped, from 4.3% to 4.2%, but that decline owed more to workers leaving the labor force than to net hiring gains. Revisions compounded the weakness: April and May payrolls were cut by a combined 74,000 jobs from initial estimates, meaning the labor market has been softer for longer than the early prints suggested.
Put the two data sets side by side and a pattern emerges that economists have taken to calling
