EmailThe initial claims level fell from an upwardly revised 376,000 (from 375,000) for the week ending June 30 to 350,000 for the week ending July 7. The Briefing.com consensus pegged the initial claims level at 375,000. The drop in initial claims -- which fell to its lowest level since March 2008 -- was not due to an improving labor sector. It was the result of poor seasonal adjustment factors. Typically, motor vehicle manufacturing plants temporarily shut down during this time and retool for new model year changes. Motor vehicle sales have run stronger-than-expected since January, leaving many manufacturers with low inventory levels.
Manufacturers, including Chrysler Group, Ford (F), and Nissan, all kept plants open to replenish inventories. That caused the seasonal adjustments to over adjust for the usual number of layoffs coming from the motor vehicle sector, which resulted in a lower initial claims level. Seasonal adjustment problems tend to last a few weeks and claims will likely remain biased until the end of the month. The continuing claims level fell from an upwardly revised 3.318 mln (from 3.306 mln) for the week ending June 23 to 3.304 mln for the week ending June 30. The consensus expected the continuing claims level to fall to 3.300 mln.
