· Initial
claims for unemployment insurance rose again last week. The 7,000
increase to 455,000 followed the unrevised 45,000 surge during the week
earlier. The latest level was the highest since March of 2002 and it
surpassed Consensus expectations for a decline to 420,000 claims.
· The Labor Department indicated that a program to locate people eligible for jobless benefits played a role in last week's increase in claims.
· As a result of the latest jump in initial claims, the four-week moving average increased to 419,500 (34.5% y/y), the highest level since mid-2003. During July claims averaged 393,000.
· A
claims level below 400,000 typically has been associated with growth in
nonfarm payrolls. During the last ten years there has been a (negative)
76% correlation between the level of initial claims and the m/m change
in nonfarm payroll employment. Over the longer period of time, the level
of claims for jobless insurance has not trended higher with the size of
the labor force due to a higher proportion of self-employed workers who
are not eligible for benefits.
· Continuing claims for unemployment insurance during the latest week rose 31,000 after a little revised 183,000 jump during the prior week. The four-week moving average of continuing claims surged to 3,201 which was its highest level since late-2003.
· Continuing claims provide some indication of workers' ability to find employment and they lag the initial claims figures by one week.
· The insured rate of unemployment was stable at 2.5%, the highest level since early 2004.
· How Much Have U.S. House Prices Fallen from the Federal Reserve Bank of St. Louis is available here.
· Unanchored Expectations? Interpreting the Evidence from Inflation Surveys from the Federal Reserve Bank of San Francisco can be found here.