FXstreet.com (Barcelona) - Contrary to the expectations of an increase, initial jobless claims change remained practically flat in the week of January 19th, according to data released by the US Labor Department.
The amount of laid-off workers applying for their unemployment benefit for the first time declined by 1,000 last week to a total volume of 301,000, from the previous week revised 302,000 jobless claims, instead of the 19 k increased forecasted by market analysts. The more trustworthy four moving average, which erases seasonal influences, posted a 14,000 decrease to 314,750.
On the other hand, continuing claims posted a 75k decrease during the week of January 12th to a total amount of 2,672,000, according to the Labor Department.
According to Ian Shepherdson, Chief U.S. Economist at High Frequency Economics Ltd, despite the low reading of this week claims are increasing continuously over the year: Claims continue to confound, having undershot the consensus substantially in each of the past four weeks. We remain convinced this is nothing more than a seasonal adjustment problem, on the grounds that the year-over-year rate of increase in claims is still rising. Unadjusted claims are up 11.1% y/y this week, the biggest gain since early November and in line with the increase implied by the weak ISM survey.
Following with this Tendency, Shepherdson forecasts claims rising sharply over the next few weeks: Now for the interesting bit: If this were to be repeated over the next few weeks, the adjusted headline number would average about 380K. In other words, this period of distortion will soon be over, and the upward underlying trend will reassert itself.