US DATA: Jobless Claims Marginally Better Than Expected

Latest jobless claims data were in line to slightly better than expected, with initial claims trending a little higher but still impressively low whilst continuing claims are broadly plateauing after sharper increases in 1H25. The non-seasonally adjusted level of continuing claims supports this, above levels for recent non-pandemic years but recently maintaining this relative gap rather than pushing higher still. 

• Initial jobless claims were essentially as expected at 229k (sa, cons 230k) in the week to Aug 23 after a marginally downward revised 234k (initial 235k) the week prior.
• The four-week average increased again to 229k (+3k) for a little further off recent lows of 221k. That’s still reasonably close to the 218k averaged through 2019 considering the covered employment pool is some 5.5% higher since then.
• Continuing claims meanwhile surprised lower at 1954k (cons 1966k) in the week to Aug 16, covering a payrolls reference period, after a downward revised 1961k (initial 1972k).
• This is yet another downward revision to the continuing claims, something that has consistently been going on for months, with two initially reported >1970k weeks revised away in August. As things stand, the 1968k from late July is the recent high (last higher in late 2021) having poked above the 1964k in mid-June.
• Payrolls reference period comparisons: initial at 234k vs 221k in July, 246k in June and 226k in May; continuing at 1954k (pre-revisions) vs 1946k in July, 1964k in June and 1907k in May.
• Taking a step back, initial claims are averaging 11k above the 218k in 2019 when the u/e rate averaged 3.67% whilst continuing claims are close to the 2017 average of 1957k when the u/e rate averaged 4.36%. The latest u/e rate stood at 4.25% in July, remaining close to the 4.15% averaged for over a year now but with measures such as the Conference Board labor differential implying increases ahead. The median FOMC member penciled in a 4.5% u/e rate for 4Q25 and 4Q26.