The number of initial jobless claims hit a six-month high this week, as did the four-week rolling average, according to the new release from the Bureau of Labor Statistics. The new data marks a high since the first quarter of the year, and comes as no surprise after the latest round of economic indicators show stagnation and malaise setting into the American economy. Even the AP can’t feign surprise any longer:
First-time claims for jobless benefits edged up by 2,000 to a seasonally adjusted 484,000, the Labor Department said Thursday. Analysts had expected a drop. That’s the highest total since February.
Initial claims have now risen in three of the last four weeks and are close to their high point for the year of 490,000, reached in late January. The four-week average, which smooths volatility, soared by 14,250 to 473,500, also the highest since late February.
The prospects of more layoffs added to this week’s grim outlook for the economy, which began Tuesday when the Federal Reserve lowered its assessment of the recovery.
Investors were bracing for another rocky day on Wall Street. Dow Jones industrial average futures, which were down about 50 points before the report came out, fell further. They were down nearly 90 points before the market opened.
That followed a Dow fall yesterday of 265 points after Wall Street saw the much-worse-than-expected trade numbers from June. Exports and manufacturing have reversed since a brief period of growth, and the outlook for sales abroad seems pessimistic. That will have an impact on future hiring — and since most of the economic woes in the US are tied to joblessness, the outlook for overall growth is also pessimistic.
The chart below tracks initial jobless claims for the year:
The four-week rolling average will probably have more impact, as it is supposed to eliminate weeklong spikes and troughs. Hitting a six month high shows that whatever gains the US made in Q1 and part of Q2 have more or less dissipated. We have not even come close to the 325,000 level that usually indicates healthy job creation over that which merely keeps up with population growth, and we are once again headed in the wrong direction.
Update: Reuters still didn’t see it coming:
The number of U.S. workers filing new claims for unemployment insurance unexpectedly rose to its highest level in close to six months, a fresh signal of a weak jobs market. …
Economists polled by Reuters had expected claims in the latest week to fall to 465,000 from the previously reported 479,000.
Maybe Reuters should find other economists to poll. Paul Krugman is busy enough these days. (h/t DogSoldier)