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Economy in Brief
U.S. Index of Leading Indicators Fell Again in July
The Conference Board's Composite Leading Economic Indicators Index fell 0.4% m/m...
U.S. Philly Fed General Activity Index Back to Positive Reading in August
The current general activity diffusion index rose nearly 19 points in August to 6.2...
U.S. Unemployment Claims Slightly Lower
Initial claims for unemployment insurance went down 2,000 in the week ended August 13 to 250,000...
Inflation Rages in EMU and Hovers Globally
Inflation in the European Monetary Union in July finalizes at 8.8% year-over-year...
U.S. Retail Sales Hold Steady in July; Nonauto Sales Rise
Total retail sales remained unchanged during July (10.3% y/y)...
Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
by Carol Stone August 25, 2005
Initial claims for unemployment insurance fell by 4,000 in the week ended August 20 to 315,000, partially reversing the prior week's revised 8,000 increase. This latest figure was right in line with Consensus expectations.
The four-week moving average of initial claims rose to 315,000 (-6.7% y/y).
Continuing claims for unemployment insurance fell 9,000 in the August 13 week; the previous week's number was revised to a 22,000 increase from 28,000 reported initially.
The insured unemployment rate remained at its four-year low of 2.0% for a sixth consecutive week.
Initial claims are highly sensitive to the forces generating economic growth. Indeed, quarterly average claims have an 82% negative correlation with 4-quarter GDP growth. So in our chart, we have plotted weekly claims with those 4-quarter growth rates. We have used the "horizontal reference" feature of DLXVG3 to draw a line at 3.5%; the bar feature then points the individual bars up or down relative to that reference line instead of zero. There we see that turning points in claims appear to be roughly associated with shifts in growth above and below 3.5%. Four-quarter growth has been 3.6% throughout the first half of 2005 -- and initial unemployment insurance claims have hovered in a tight range of 315,000 to 330,000. The lower end of this range has held now since mid-July; this suggests good growth for Q3 as well -- or at least a firm foundation from which to meet the increasing burden of high energy costs.
Unemployment Insurance (000s) | 08/20/05 | 08/13/05 | Y/Y | 2004 | 2003 | 2002 |
---|---|---|---|---|---|---|
Initial Claims | 315 | 319 | -7.9% | 343 | 402 | 404 |
Continuing Claims | -- | 2,578 | -10.3% | 2,926 | 3,531 | 3,570 |