EmailFor the first time since the week ending April 1, the initial claims level fell back below 400,000. Initial claims declined from 422,000 for the week ending July 16 to 398,000 for the week ending July 23. The Briefing.com consensus expected the initial claims level to drop to 415,000.
More impressively, the latest decline came at a time when the seasonal adjustment factors were behaving normally. For the preceding two weeks, the seasonal adjustment factors were expecting a surge in automotive layoffs which did not materialize. As a result, those claim levels were biased lower than what they would have been if the adjustment factors were accurate.
The drop to 398,000 is the first real labor improvement since April. Furthermore, if claims remain at or below their current level, it could be a sign that the economy is finally beginning to rebound following the temporary factors -- high oil prices, Japanese earthquake and tsunami, and China slowdown -- that have been blamed for the economic weakness in the U.S. thus far in 2011.
The continuing claims level decreased from 3.720 million for the week ending July 9 to 3.703 million for the week ending July 16. The consensus expected the continuing claims level to fall to 3.688 million.
