Initial Jobless Claims Moderate, Continuing Claims Fall

Analysts have been calling for weekly jobless claims to fall to 550,000 for the past six weeks, and in the period ending September 5, it finally happened. Until the four-week average follows suit, however, it’s not clear there is much meaning in the apparent moderation, especially as 550k still suggests rapid job cutting.

The 550k figure indicates that 26,000 fewer Americans filed for initial unemployment benefits than the previous week. That’s certainly in the direction the economy needs right now, but it’s hard to be optimistic about stabilization when the 4-week average is 570k, whereas in a stable job market the weekly figure would be closer to 360k.

Continuing claims, which track the total number of people receiving jobless benefits, fell by 159k to 6.088 million. In previous weeks, the decline in continuing claims has been attributed to a technicality: as the unemployed run off the 26-week limit on benefits, the continuing claims figure falls even though jobs haven’t necessarily been created.

But in this week’s survey, the number of people receiving emergency benefits fell for the second straight week (there is a time lag; the data is from Aug. 22), which means job creation may be improving as the summer ends.

“This in fact is the lowest print on this indicator since April, and it suggests that the recent moderation in continuing claims is perhaps gaining traction,” said Ian Pollick from TD Securities.

He called the report “encouraging,” but added that the economy will “remain weak for some time,” meaning that elevated jobless claims will still be a reality for months to come.

All Content Copyright © 2003 – 2009 Brown House Media, Inc. All Rights Reserved.nReproduction in any form without permission of MortgageNewsDaily.com is prohibited.