RTTNews - First-time claims for unemployment benefits showed a moderate increase in the week ended July 18th, according to a report released by the Labor Department on Thursday, with the increase coming roughly in line with economist estimates.
The report showed that jobless claims rose to 554,000 from the previous week's revised figure of 524,000. Economists had expected jobless claims to increase to 557,000 from the 522,000 originally reported for the previous week.
While initial claims rebounded after setting a six-month low in the previous week, the less volatile four-week moving average slipped to 566,000 from the previous week's revised average of 585,000.
Analysts have pointed out that seasonal issues in the auto sector have continued to impact jobless claims, skewing the data artificially lower.
The report also showed that continuing claims in the week ended July 11th fell to 6.225 million from the preceding week's revised level of 6.313 million. With the decrease, continuing claims fell to their lowest level since the second week of April.
However, Peter Boockvar, equity strategist at Miller Tabak noted, Continuing claims are now being pressured due to more people seeing their 26 week unemployment insurance expire and who are falling off the calculated rolls.
While many people that are unemployed are getting extensions of their benefits by up to 79 weeks, they are not included in the Labor Department's calculations.
The labor market has been a significant source of concern in recent months, although recent reports have shown some stabilization in the rate of job losses.
Last week, the minutes of the Federal Reserve's June meeting showed that the central bank now expects the unemployment rate to come in higher than previously anticipated despite an improvement in the outlook for the overall economy.
The estimates for the unemployment rate in 2009 were revised to up to 9.8 to 10.1 percent from the previous estimate of 9.2 to 9.6 percent, while the unemployment rate in 2010 is now expected at 9.5 to 9.8 percent compared to the previous estimate of 9.0 to 9.5 percent.
The Fed added that FOMC participants foresaw only a gradual improvement in labor market conditions in 2010 and 2011, leaving the unemployment rate at the end of 2011 well above the level they viewed as its longer-run sustainable rate.
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