US initial jobless claims rise for first time since late March; seasonal adjustments complicate data

Categories
Uncategorized

US initial jobless claims rose by 109,000 in the week ended July 18 from the previous week to a total of approximately 1.4 million, according to seasonally adjusted numbers released today by the US Department of Labor. It was the first increase since late March.

In addition, the previous week’s level was revised upward by 7,000.

The four-week moving average of claims fell by 16,500 from the previous week’s revised average to approximately 1.4 million; the previous average was revised upward by 1,750.

In addition to the standard filings, 974,999 initial claims were filed under the Pandemic Unemployment Assistance program, an increase of 19,727 from the prior week, according to unadjusted numbers.

Claims had been trending downward from a peak of 6.9 million in late March, MarketWatch reported. However, seasonal adjustment factors are “playing havoc” with the jobless claims data in July, as this is the month when auto plants typically shut down for summer holidays, but that is not happening this year.

“To put these data in perspective, before the pandemic surge, the highest single weekly tally ever was 695,000 in 1982, said Josh Shapiro, chief US economist at MFR Inc. “Now, more than four months into the crisis, initial claims are still running at an astonishing 1.4 million per week. We continue to believe that after an initial period of sharp, but partial rebound as the economy reopens, the remainder of the process is going to be prolonged, and that the road back to February’s peak employment levels will be a long and bumpy one.”