EmailInitial claims fell slightly from 429,000 for the week ending June 18 to 428,000 for the week ending June 25. The Briefing.com consensus expected the initial claims level to fall to 420,000.
The DOL reported that there were no special factors contributing to the elevated claims level.
Not to sound like a broken record, but the jobless claims report has been providing the same story every week for the past two months and it is not a good one.
Initial claims have remained above the upper bound (410,000) of our "Recovery Zone" for 11 out of the last 12 weeks and above 400,000 during that entire time. During the entire month of April, the initial claims level was boosted by artificial and one-time exogenous factors. These "problems" were corrected by the first week of May, but claims have not returned to their March lows. Typically, claims return to previous levels within three weeks of the end of the special factors. That has not happened.
As a result, the initial claims level is pointing not only toward a hesitation in business expansion, but, more importantly, to a weakening in overall economic conditions.
Unless claims drop precipitously over the next few weeks, there is a strong possibility that payroll gains in the next month or two will not exceed the 100,000 needed to support normal labor force growth and a stable unemployment rate.
The continuing claims level decreased from 3.714 million for the week ending June 11 to 3.702 million for the week ending June 18. The consensus expected continuing claims to decline to 3.700 million.
