After reporting a notable drop in first time claims for U.S. unemployment benefits last week, the Labor Department released a report on Thursday showing that initial jobless claims rebounded by more than anticipated in the week ended July 14th.
The Labor Department said jobless claims jumped to 386,000 from the previous week's revised figure of 352,000. Economists had expected jobless claims to climb to 365,000 from the 350,000 originally reported for the previous week.
With the increase, jobless claims bounced off the four-year low set in the previous week, which was partly due to seasonal distortions.
Jim O'Sullivan, Chief U.S. Economist at High Frequency Economics, said, "While we are surprised that claims bounced back as quickly as they did, we did not view the plunge reported a week ago as indicative of the trend anyway."
"Given seasonal adjustment challenges relating to annual summer shutdowns in the auto industry, the information value of claims is limited right now," he added. "The data should become 'clean' again in the next couple of weeks."
The report showed that the less volatile four-week moving average edged down to 375,500 from the previous week's revised average of 377,000.
Meanwhile, continuing claims, a reading on the number of people receiving ongoing unemployment assistance, crept up to 3.314 million in the week ended July 7th from the preceding week's revised level of 3.313 million.
The four-week moving average of continuing claims came in at 3,311,750, an increase of 1,000 from the preceding week's revised average of 3,310,750.
Peter Boockvar, managing director at Miller Tabak, said, "Bottom line, the decision on the part of the Fed to act in two weeks comes down to their view of the labor market and unfortunately the claims data in July is not giving a seasonally adjusted clean report."
"Not that the Fed is going to make a decision on a few weeks of Jobless Claims, but in the context of the current debate, every jobs data point counts all that more," he added.
by RTT Staff Writer
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