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Initial Jobless Claims Up Less Than Expected

First-time claims for unemployment insurance rose 8,000 for the week ended July 28 to 365,000, the ""Labor Department"":http://www.dol.gov/ reported Thursday. Economists surveyed by Bloomberg had expected 370,000 initial claims. The prior week's total was revised up to 357,000 from the originally reported 353,000.


Continuing claims â€" reported on a one-week lag â€" fell 19,000 to 3,272,000 from the prior week's 3,291,000, revised from the originally reported 3,297,000.

Despite the week-week increase, the numbers reflected a slightly stronger labor picture after a volatile few weeks in which unemployment insurance claims were affected by seasonal changes in the auto industry.

Historically, the auto industry furloughs workers in July to allow plants to re-tool for a new model year and the Labor Department applies seasonal factors to adjust for those furloughs so that the temporary spike in claims â€" furloughed workers are eligible for unemployment insurance â€" does not distort the data. With stronger auto sales plants were not shut and workers were not furloughed so the seasonal factors â€" which are calculated each year based on prior reports - brought down already low numbers, making them still lowers.

The seasonal adjustment factors are set at the beginning of each year. This week's report uses factors which had assumed those furloughed workers returned to work.


The unadjusted data showed a 30,083 drop in first time claims.

The roller-coaster claims data continue to reflect the backlog from the July 4 holiday, albeit to a lesser extent than the last two weekly reports. While newly unemployed individuals can file claims online even when office are closed, clerical staff is not available to process those filings and report them during holiday periods.

This week's report will have no effect on tomorrow's Employment Situation report on the nation's unemployment rate for July. That report will be based on data for the week of the month including the 12th calendar day. From mid-June to mid-July, initial claims dropped by 4,000 and continuing claims, often a surrogate for new jobs, dropped 10,000.

The four-week moving average of initial claims â€" a statistical device used to smooth the more volatile weekly data -- fell 2,750 to 365,500 from 368,250 to the lowest level since the end of March.

The four week moving average of continuing claims fell 11,500 to 3,298,500, a six-week low.

The total number of people claiming benefits in all programs â€" reported on two week lag -- for the week ending July 14 was 5,964,553, a decrease of 69,672 from the previous week. These data are not seasonally adjusted and were affected by the same factors which caused claims to move sharply when auto industry furloughs kicked in. According to the latest BLS report, 12.749 million people were officially counted as unemployed in June.

States reported 2,532,828 persons claiming EUC (Emergency Unemployment Compensation) benefits for the week ending July 14, a decrease of 23,628 from the prior week, the Labor Department said. There were 3,184,621 claimants in the comparable week in 2011.

According to the Labor Department detail, also reported on a one-week lag, largest increases in initial claims for the week ending July 21 were in Kentucky (+4,073), Vermont (+236), Puerto Rico (+48), the Virgin Islands (+14), and South Dakota (+10), while the largest decreases were in California (-32,107), New York (-15,615), North Carolina (-12,448), Georgia (-7,923), and Alabama (-5,122).

About Author: Mark Lieberman

Mark Lieberman is the former Senior Economist at Fox Business Network. He is now Managing Director and Senior Economist at Economics Analytics Research. He can be heard each Friday on The Morning Briefing on POTUS on Sirius-XM Radio 124.

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