jobless claims were below forecast

Initial jobless claims were modestly below forecasts, falling 11,000 to 457,000 in the week ending July 24th. The four-week average of claims fell 4,500 to 452,500.


The volatility in initial claims around the period of July factory shutdowns is high and it is difficult to extract signal from shifting seasonal patterns and the usual noise in the data. The Labor Department said there were no special factors affecting unemployment claims in the latest week but it will take three more weeks of data to get a clean, post-shutdown reading on the four-week average of initial claims. From a big picture perspective, claims remain above the level that has been consistent with sustained job creation but there is some suggestion that the relationship between claims and payrolls may have shifted as private payrolls have grown modestly thus far this year. Furthermore, layoff announcements are at typical expansion levels, whereas jobless claims are not. Unemployment claims remain something of an enigma but we still expect claims to drift lower over the balance of the year consistent with our view that the economy will grow around 3% in real terms with moderate job creation.


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