While the Labor Department released a report Thursday morning showing a modest increase in first-time claims for U.S. unemployment benefits in the week ended July 28th, claims rose by less than economists had been anticipating.
The report showed that initial jobless claims crept up to 365,000 from the previous week's revised figure of 357,000. Economists had expected jobless claims to climb to 370,000 from the 353,000 originally reported for the previous week.
Robert Kavcic, an economist with BMO Capital Markets, noted, "The Labor Department said there were no special factors in this week's report, but claims have been especially volatile in recent weeks given seasonal adjustment difficulties resulting from fewer summer shutdowns in the auto sector."
"With that in mind, the 4-week average for claims is probably a better measure to look at, and the good news is that it continued to drift down," he added.
The Labor Department said that the four-week moving average edged down to 365,500 from the previous week's revised average of 368,250.
Kavcic noted that the four-week moving average is not quite back to the lows seen in late March but is still well below the readings of nearly 390,000 seen as recently as mid-June.
The report also showed that continuing claims, a reading on the number of people receiving ongoing unemployment assistance, fell to 3.272 million in the week ended July 21st from the preceding week's revised level of 3.291 million.
The four-week moving average of continuing claims also dropped to 3,298,500 from the preceding week's revised average of 3,310,000.
Jim O'Sullivan, Chief U.S. Economist at High Frequency Economics, said, "Today's report was for the week of July 28, two weeks after the sample week for tomorrow's employment report."
"Nonetheless, the absence of an ongoing rise in claims increases our confidence that last month's 80,000 reading for payrolls overstated weakening in the trend recently," he added.
Friday morning, the Labor Department is scheduled to release its report on the employment situation in the month of July.
Economists currently expect the Labor Department report to show that U.S. employment rose by about 100,000 jobs in July following a weaker than expected increase of 80,000 jobs in June. The unemployment rate is expected to remain unchanged at 8.2 percent.
Payroll processor Automatic Data Processing, Inc. released a report on Wednesday showing that employment in the private sector increased by much more than anticipated in July.
The report showed that the private sector added 163,000 jobs in July following a downwardly revised increase of 172,000 jobs in June. Economists had expected an increase of about 120,000 jobs compared to the increase of 176,000 jobs originally reported for the previous month.
by RTT Staff Writer
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