RTTNews - While the Labor Department released a report on Thursday showing that first-time claims for unemployment benefits in the week ended July 25th came in above the average analyst estimate, there were some concerns that jobless claims could have come in substantially higher.
The report showed that jobless claims rose to 584,000 from the previous week's revised figure of 559,000. Economists had expected jobless claims to rise to 575,000 from the 554,000 originally reported for the previous week.
Peter Boockvar, equity strategist at Miller Tabak noted, This should be the first clean number in weeks where its not influenced by the seasonal distortions that was brought by the differing time schedules of auto plant shutdowns.
Without the seasonal issues in the auto sector skewing the data artificially lower, there was some concern that jobless claims could have spiked last week.
The insured unemployment rate was unchanged at 4.7% and there is a sigh of relief in the market that it didn't spike higher now that the claims data is not artificially suppressed due to seasonal distortions, Boockvar said.
The Labor Department noted that the less volatile four-week moving average fell to 559,000 from the previous week's revised average of 567,250.
With the decrease, the moving average fell for the fifth straight week, dropping to its lowest level since coming in at 547,00 in the week ended January 24th.
Additionally, the report showed that continuing claims in the week ended July 18th fell to 6.197 million from the preceding week's revised level of 6.251 million.
Next Friday, the Labor Department will release its closely watched monthly employment report for the month of July. The report is expected to show a slowdown in the pace of job losses compared to the previous month.
Economists expect the report to show that non-farm payroll employment fell by 333,000 jobs in July following a decrease of 467,000 jobs in June. At the same time, the unemployment rate is expected to edge up to a twenty-six year high of 9.6 percent from 9.5 percent.
Yesterday, the Federal Reserve's Beige Book report said that all twelve Fed districts indicated that the labor markets remain slack, with most sectors either reducing jobs or holding steady.
However, the report showed that the Boston, Cleveland, Richmond, Atlanta, Chicago, St. Louis, and Minneapolis districts saw selective hiring, including attempts by some firms to take advantage of layoffs elsewhere to pick up experienced talent.
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