Initial Claims Higher than Expected

Thursday, July 3, 2008

Initial claims for the week of June 28 rose 16K to 404,000. That was worse than the market's estimate of 385,000 and it is the first time claims have been above 400K since March 29, 2008. It is possible that natural disasters in the Midwest added to the level of claims. The 4-week moving average increased to 390,500 from 379,250. This isn't a terrible report, but it isn't great either. It does reflect a loosening labor market, but that isn't new news. It has been evident in past claims reports and the monthly employment reports. To that end, the June employment report, which was released at the same time, is overshadowing the latest claims figure, which is at a level that suggests we're likely to see another decline in nonfarm payrolls in July.