Initial jobless claims fell more than expected last week, providing a glimpse of optimism amidst a complex economic landscape, according to the latest weekly survey from the Department of Labor.
- Seasonally adjusted initial claims were reported at 233,000, a decrease of 17,000 from the previous week’s revised level. This marks the lowest level in the last four weeks, signaling potential resilience in the labor market.
- The four-week moving average, a metric that smooths out weekly volatility, rose to 240,750. This increase represents the third consecutive weekly rise and the highest level since last August.
Continuing claims, which account for the number of people already receiving unemployment benefits, also painted a concerning picture. Seasonally adjusted insured claims climbed to 1.875 million for the week ending July 27th, an increase of 6,000 from the previous week’s revised level.
- This is the highest level recorded since November 2021, indicating that more people are staying on unemployment rolls for longer periods.
What They’re Saying: Heather Long of the Washington Post highlighted the mixed nature of the data on Twitter: “Good news: Initial jobless claims came in LOWER than expected last week. This is another sign the economy is solid…Bottom line: Temporary layoffs in Texas due to Hurricane Beryl did impact the July jobs report somewhat and appear to be reversing.” Texas saw a notable drop in initial claims, decreasing by almost 5,000, suggesting that the spike in claims was partly due to temporary factors related to Hurricane Beryl.
The decline in initial claims from Texas lends credence to the argument that recent increases were influenced by temporary disruptions rather than a fundamental weakening of the job market. However, the rise in continuing claims indicates that the broader labor market is starting to weaken.
