By Natalie DeCoste
Bad news for the U.S. economic recovery as the latest weekly jobless claims numbers revealed an unfortunate upward turn.
For the week ending July 17, initial filings for unemployment insurance totaled 419,000. The new figures reflect an increase of 51,000 from the previous week’s revised level, which was already revised by 8,000 from 360,000 to 368,000.
The increase to the initial claims was unexpected and well above the 350,000 economists for the Dow Jones had predicted.
“Recovery is never a perfect straight line,” said Mark Hamrick, senior economic analyst at Bankrate.
The four-week moving average for initial claims, a more stable measure of unemployment, also reflected an increase, albeit more moderate. The stable figure was 385,250, an increase of 750 from the previous week’s revised average. The previous week’s average was revised up by 2,000 from 382,500 to 384,500.
The news from the Department of Labor shook the stock market and slowed upward progress. The Dow Jones Industrial Average fell 33 points, the S&P 500 traded close to flat, and the tech-filled Nasdaq Composite led the markets with a modest 0.4% gain.
“There’s no question that the jump in jobless claims is an unwelcome surprise and a dent to momentum for continued improvement on the jobs front. The disappointing number may cause an initial shock to the system, but many could view this as short-term volatility in the labor market until we see benefits start to expire,” Mike Loewengart, managing director of investment strategy at E-Trade, told CNBC.
Not all the figures coming out of the Department of Labor were negative as the advance seasonally adjusted insured unemployment rate was 2.4% for the week ending July 10, a figure that trails behind initial claims. The rate remained unchanged from the previous week’s unrevised rate.
Continuing claims also showed more positive signs for the economy as the figure decreased.
“The advance number for seasonally adjusted insured unemployment during the week ending July 10 was 3,236,000, a decrease of 29,000 from the previous week’s revised level. This is the lowest level for insured unemployment since March 21, 2020 when it was 3,094,000,” read the Department of Labor’s report.
The states with the highest insured unemployment rates in the week ending July 3 were in Virgin Islands (4.8), Puerto Rico (4.7), Nevada (4.1), Rhode Island (3.9), California (3.8), Illinois (3.7), New Jersey (3.7), New York (3.6), Connecticut (3.5), District of Columbia (3.1), and Pennsylvania (3.1).
Meanwhile, the states with the largest increases in initial claims for the week ending July 10 were in Texas (+10,091), New York (+8,190), Pennsylvania (+4,319), Tennessee (+3,061), and Missouri (+1,793). On the flip side the states with the largest decreases were in Georgia (-5,286), Rhode Island (-4,807), Puerto Rico (-3,934), Kentucky (-3,771), and Maryland (-2,497).
