Thirty years of initial unemployment compensation claims as measured by the four-week running average.
For the week ending July 27, the Department of Labor
reported Thursday, seasonally adjusted initial claims for unemployment compensation fell to 326,000, down 19,000 from the previous week's revised figure of 345,000, the lowest level since the week of January 19, 2008. For the comparable year of 2012, the number was 366,000.
The four-week running average that flattens volatility in the weekly count fell 4,500 to 341,250.
The positive development contains one caveat: July is a tough month to measure because of seasonality issues:
“It’s a stronger labor market than anybody thought we’d be seeing this time of year,” said Guy Berger, an economist at RBS Securities Inc. in Stamford, Connecticut, noting the claims data are affected by auto plant shutdowns that have occurred on a smaller scale this year. “We’re talking about continued decent payroll growth.” [...]
Auto plants often shut down in July to retool for the new model year, an activity that causes claims data to become more volatile. Ford Motor Co. idled most of its North American assembly plants for one week this summer instead of two. Three of Chrysler Group LLC’s assembly plants and all but one of its engine and transmission factories will skip a summer shutdown this year. General Motors Co. hasn’t had a formal summer shutdown since its 2009 bankruptcy.
“Claims for the entire month of July are pretty much a waste because of seasonal issues,” Jacob Oubina, senior economist at RBC Capital Markets LLC in New York, said before the report. “Volatility spikes seriously in this number in early to mid-July. We’ll get cleaner information on claims in the weeks ahead.”
For the week ending July 13, the total number of people claiming benefits in both state and federal programs was 4,695,366, down 154,140 from the previous week. For the comparable week in 2012, there were 5,964,451 people claiming benefits in all programs. The drop in claims reflects the fact that some people have found work and some have exhausted their benefits. A few states have reduced how long jobless people are eligible to collect compensation checks from the half-century-old standard of 26 weeks to 20 weeks or less.
For the week ending July 13, there were 1,564,517 people collected weekly checks under the federally funded Emergency Unemployment Compensation program. This was implemented during the Great Recession to extend the number of weeks eligible out-of-work can collect benefits. For the comparable week of 2012, 2,532,828 collecting EUC checks.
