The number of Americans filing initial jobless claims climb to a two-month high for the week ending July 6. The Department of Labor (DOL) reports that the metric increased by 16,000 to 360,000 applications compared to a revised 344,000 the prior week.
According to a DOL spokesperson, the seasonal factors of Independence Day holiday and routine vehicle plant shut-downs for the annual retooling makes it a challenge to make the appropriate adjustments.
Bloomberg’s survey of 47 economists forecast a number of 340,000 for first-time jobless claims. Their estimates ranged from of 315,000 to 380,000 claims.
The DOL report shows that the four-week moving average increased to 351,750 from 345,750 the prior week. The moving average provides a more accurate picture because it eliminates the volatility inherent in weekly figures.
Sustainable hiring needed
It is important that employers keep layoff or firings at a minimum to allow the formation of support for future job creation. This assumes that the economy—during the second half of 2013—continues to absorb the impact of tax hikes and cut backs in federal government expenditures earlier this year.
Policy makers hope employers will create more jobs, which will lead to income growth for consumers. Consumer spending makes up 70 percent of the U.S. domestic economy.
Brian Jones, a senior economist for Societe Generale in (New York), predicted the level of initial filings. Jones cautioned against reading too much into the numbers skewed by auto plant shut downs. “The labor market is showing steady progress. The pace of hiring is good,” said Jones.
Additional jobless claims data
Continuing claim decreased by 24,000 t0 2.98 million people for the week ended June 29. This number does not include individuals who received extended benefits funded by the federal government.
People who have exhausted their traditional unemployment benefits and now collect emergency and extended benefit payments declined by 22,700 to 1.65 million for the week ended June 22.
The insured unemployment rate– for all individuals eligible for unemployment benefits—decreased to 2.1 percent for the week ended June 29—a 0.1 percentage point change. This metric has a direct correlation with the jobless rate.
The number of persons filing claims for UI benefits under state programs decreased 16,079 from the revised figure of 2,784,958 the prior week. At the same point in 2012, the insured unemployment rate was 2.4 percent with a volume of 3,112,199 workers.
Thirty-three states and territories recorded increase in claims for unemployment benefits. New Jersey, New York, Connecticut, Michigan, and Washington experienced the largest jumps in applications. The states with the largest decrease in initial claim applications are California, Florida, Pennsylvania, Massachusetts, and Maryland.