Initial jobless claims were lower than foreceast but still overall jobs are still being shed

Initial jobless claims were significantly lower than forecasts, falling 27,000 to 451,000 in the week ending September 4th. The four-week average of claims declined 9,250 to 477,750.

BOTTOM LINE

It is beginning to look like the Summer run-up in jobless claims may have begun to roll over (although a BLS official said that states were slow reporting their claims numbers in the latest week—presumably raising the risk of underestimation of claims) and the four-week average has fallen by 10,000 from its peak of two weeks ago, while the actual claims number is down 53,000 from three weeks ago. The last employment report adds to our suspicions that there has been a shift in the relationship between initial claims and job growth (job growth being stronger than suggested by the claims data) and the low level of layoff announcements do not sit easily next to the claims data either. Our best guess is that the claims data will fall somewhat over the next few months but we are still quite far away from the sub-400,000 area of claims that we associate with solid job creation.

Source RDQ

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