US DATA: Relative Stability In Jobless Claims Data After NFP Weakness

Jobless claims were a little higher than expected in latest weekly data. Neither are for a payrolls reference period but they nevertheless provide a sign of relative stability compared to the large downward revisions in last week’s July payrolls report. Initial claims remain close to periods of historical tightness whilst continuing claims saw a more notable push to fresh recent highs but could be due yet another downward revision. 

• Initial jobless claims 226k (sa, cons 222k) in the week to Aug 2 after a marginally upward revised 219k (initial 218k)
• The four-week average was unchanged at 221k, still very close to the 218k averaged in 2019 for a comparison with previous labor market tightness.  
• Continuing claims 1974k (sa, cons 1950k) in the week to Jul 26 after a downward revised 1936k (initial 1946k). It came about from no sign of a tick lower in non-seasonally adjusted claims.
• That’s a new recent high for seasonally adjusted continuing claims (last higher late 2021) but they have recently had a habit of being revised lower – surprisingly, we count at least the past fifteen releases to have been revised lower.
• That could easily see it more consistent with what is previously seen to have been the cycle high of 1964k in mid-June.
• As for the claims rate, the recent increase in covered employment means that the 1.29% rate in latest data ties with the 1.29% from mid-June for recent highs.
• Taking a step back with a historical comparison, initial claims are close to the 2019 average of 218k (when the unemployment rate averaged 3.67%) whilst continuing claims are close to the 2017 average of 1957k (when the u/e rate averaged 4.36%). For context, the latest u/e rate stood at 4.25% in July after Friday’s weak payrolls report but remains close to the 4.15% averaged for over a year now.