Initial jobless claims jumped upward again last week, continuing a vacillation that has been the norm all year long. The latest rise now sets a slight upward trendline for the second quarter of 2010, which makes it appear that tomorrow’s monthly unemployment rate may wind up delivering bad news to the Obama administration. The latest increase brings the US to its fourth-highest level in the last three months:
In the week ending June 26, the advance figure for seasonally adjusted initial claims was 472,000, an increase of 13,000 from the previous week’s revised figure of 459,000. The 4-week moving average was 466,500, an increase of 3,250 from the previous week’s revised average of 463,250.
The advance seasonally adjusted insured unemployment rate was 3.6 percent for the week ending June 19, unchanged from the prior week’s revised rate of 3.6 percent.
The advance number for seasonally adjusted insured unemployment during the week ending June 19 was 4,616,000, an increase of 43,000 from the preceding week’s revised level of 4,573,000. The 4-week moving average was 4,567,500, a decrease of 25,250 from the preceding week’s revised average of 4,592,750.
Here is the chart for Q2:
Again, the green line is the seasonally-adjusted figure normally used for comparison. The black line that runs through it is the trendline for the quarter. That has an unmistakable incline now, thanks to the inability of the economy to keep people in jobs.
The AP calls this a sign of a “weak recovery,” and sees more optimisim for tomorrow’s numbers:
Initial claims for unemployment benefits rose for the second time in three weeks last week, signaling that layoffs are rising.
The Labor Department said Thursday that new claims for jobless benefits jumped by 13,000 to a seasonally adjusted 472,000. Analysts expected a small drop, according to a survey by Thomson Reuters. …
Requests for unemployment benefits dropped steadily last year after reaching a peak of 651,000 in March 2009. Economists say they will feel more confident the economy about sustained job growth when initial claims fall below 425,000
The figures come a day before the Labor Department is scheduled to release the June jobs report. That is expected to show a modest rebound in private-sector hiring. Overall, employers are expected to cut a net total of 110,000 positions, but that includes the loss of about 240,000 temporary census jobs. Private employers are projected to add 112,000 jobs, according to a survey of economists by Thomson Reuters.
That would be an improvement from May, when businesses added only 41,000 workers. But the economy needs to generate at least 100,000 net new jobs per month to keep up with population growth, and probably twice that number to bring down the jobless rate.
That sounds like a recipe for “unexpectedly” bad results tomorrow. The increase of 41,000 private-sector jobs in May came with three weeks of declines in initial jobless claims. Every week in June has had initial jobless claims of 459,000 or more, where in May three of the five weeks had 459,000 or fewer initial claims. Thompson Reuters oversold expectations for May, too.
Update: The AP avoided their favorite adverb for reporting bad economic news, but Reuters couldn’t resist (emphasis mine):
New claims for state unemployment aid unexpectedly rose last week, heightening fears the U.S. economic recovery is stalling.
Initial claims for state unemployment benefits increased 13,000 to a seasonally adjusted 472,000, the Labor Department said on Thursday.
Analysts polled by Reuters had expected claims to slip to 452,000 from the previously reported 457,000, which was revised slightly up to 459,000 in Thursday’s report.
While layoffs have slowed sharply from early last year, businesses remain skeptical of the strength of the recovery and are holding back on hiring, keeping claims for unemployment benefits at uncomfortably lofty levels.
Ugh. How could this be “unexpected”? Take a look at the chart above and it clearly shows that this has been the norm, not the exception. Reuters must employ analysts with incurable optimism. It’s a wonder they haven’t drunk hemlock at this point.
Also, the fact that “layoffs have slowed sharply from early last year” is as trite and meaningless a phrase as one will utter. Those jobs are gone. The easiest jobs to shed have already been shed. This isn’t an improvement in employment, it’s merely a reduction of the rate of unemployment.