The economic disaster continues with the next target of Europe's reverse Marshall Plan likely being the US itself. Initial claims just prolapsed to 418K, the 16th week over 400K, a 10K increase from the upward revised 408K last week (naturally before it was 405K), and a miss to expectations of 410K. Keep in mind this number will be further revised higher next week. Continuing claims was slighly better than expectations of 3,705K, printing at 3,698K, down from 3,748K. The ongoing 99 week cliff problem is hitting more and more people as 132K dropped off EUC and Extended benefit rolls for the week ended July 2. And while 9,681 of the claims were associated with Minnesota shutdown, nothing explains why there was a surge in 20,599 new claims out of New York of all places.
Here is New York's weekly initial claims change for 2011. We just had the 3rd biggest surge in unemployed New Yorkers this year.
And Goldman's take, blaming it on Minnesota as predicted:
BOTTOM LINE: Initial jobless claims rise in latest week. Trend still difficult to discern, but report is arguably a modest negative.
Initial jobless claims 418k in week ending July 16, vs. median forecast 410k.
Continued jobless claims 3,698k in week ending July 9, vs. median forecast 3,705k.
1. Initial jobless claims unexpectedly rose to 418k in the week ending July 16, up from 408k previously. The claims figures continue to be somewhat difficult to interpret due to seasonal adjustment issues in the auto sector and the government shutdown in Minnesota. The Department of Labor said that the Minnesota government shutdown added about 2k to claims this week, down from a bit over 10k last week (according to press reports). This change therefore subtracted roughly 8k from claims week-over-week. The rise in claims from the previous week could therefore be explained by 1) a rising underlying trend or 2) a reversal of seasonal biases in the automotive industry. Next week's data will help sort out which is a more likely explanation. At this point we see today's report as a modest disappointment, and expect another rise in claims next week.
2. Continued jobless claims fell by 50k in the latest available week, and the number of persons receiving benefits through the extended/emergency programs fell by about 130k on net.