Initial jobless claims jump to 428K, up 11,000

Initial jobless claims jumped last week to 428,000, one of the highest levels since the beginning of the third quarter.  The Department of Labor also revised last week’s figure upward to 417,000 as the four-week average jumped 4,000 to almost 420K:

In the week ending September 10, the advance figure for seasonally adjusted initial claims was 428,000, an increase of 11,000 from the previous week’s revised figure of 417,000. The 4-week moving average was 419,500, an increase of 4,000 from the previous week’s revised average of 415,500.

The advance seasonally adjusted insured unemployment rate was 3.0 percent for the week ending September 3, unchanged from the prior week’s unrevised rate.

The advance number for seasonally adjusted insured unemployment during the week ending September 3 was 3,726,000, a decrease of 12,000 from the preceding week’s revised level of 3,738,000. The 4-week moving average was 3,741,000, an increase of 1,250 from the preceding week’s revised average of 3,739,750.

Last week’s initial figure was 414K, up two thousand from the previous week’s 412K, which was initially 409K before it got upwardly revised as well.  Are you seeing a pattern?  Six weeks ago, the level was at 400K even, and a week prior to that it had been below 400K.  Momentum seems to have swung mildly in the wrong direction, and yes, I say mildly; we’re still talking about a 5% shift over a series of weeks.  It doesn’t indicate a sudden drop, but it shows continuing and building weakness in job creation in this economy.

Needless to say, Reuters headlines this as a “surprise increase” and that it’s … wait for it ….

The number of Americans filing new claims for jobless benefits rose unexpectedly last week in a sign concerns about a weak economy were sapping an already beleaguered labor market, data showed on Thursday.

Apparently, their analysts had expected a drop to 410K.  Instead, it moved even farther in the wrong direction.  A guess at 410K wouldn’t have been an irrational stab in the dark, but with Bank of America announcing this week their plans to lay off 30,000 people, I’d have guessed in the other direction.  I certainly wouldn’t have been surprised to see the figure increase.

Reuters also reported that the administration can’t blame the weather this time:

Excluding one week in early August, claims have held above 400,000 since early April. A Labor Department official said there was no discernible effect from Hurricane Irene or other storms in the national reading.

Despite an early improvement in Q3, it looks as if we’re mainly back to the 420K range we saw all throughout Q2.  I’d guess that the economy may have slowed even further in Q3 than Q2, and since we’re at 1% GDP growth in Q2, that’s bad news for the US and the Obama administration.