EmailThe initial claims level fell from an upwardly revised 367,000 (from 365,000) for the week ending June 28 to 361,000 for the week ending August 4. The Briefing.com consensus expected the initial claims level to increase to 375,000. For the entire month of July, the initial claims level was biased from poor seasonal adjustment factors stemming from the motor vehicle sector. Normally, motor vehicle manufacturers shut down in July for model-year retooling.
With sales exceeding expectations, many manufacturers opted to not shut down their plants. That resulted in fewer layoffs than normal and artificially pushed the initial claims level lower. The latest initial claims number was the first clean and unbiased report since the end of May, when claims averaged roughly 385,000. The substantial drop in claims from that May height suggests labor market conditions have improved over the last few weeks. Furthermore, these levels support the better-than-expected increase in payrolls found in the June employment situation report and suggest another gain of roughly 150,000 in August. The continuing claims level increased from an upwardly revised 3.279 mln (from 3.272 mln) for the week ending July 21 to 3.332 mln for the week ending July 28. The consensus expected the continuing claims level to increase to only 3.290 mln.
