Major Miss In Initial Claims As Double Dip, Deflation Takes Even Firmer Hold
Can we stop all discussion that we have avoided a double dip already? Initial claims came in at 472,000, up 12,000, compared to an expectation of 450,000. Last week was revised from 456,000 to 460,000. Dear Joe Biden - was the economic recovery in unemployment pushed back to 2011? Did companies receive the memo to fire, yet miss the other one, with the much more critical rhyming verb? Never fear - the BLS has an explanation for everything, and the surge in claims was presumably not only predictable, it was expected, and was blamed on the fact that there was a federal holiday in the prior week:yet somehow the consensus totally ignored this oh so obvious tidbit. Elsewhere the CPI was once again deflationary: CPI came in at -0.2%, and CPI ex-food and energy barely posted a heartbeat at 0.1%. Futures now retracing pretty much all EUR-driven gains. But not gold.
Some observations on the initial claims number from Market News:
Initial claims for U.S. state unemployment benefits rose 12,000 to 472,000 in the June 12 week and the previous
week was revised up after seasonal adjustment, not surprising in a post-holiday week, the U.S. Labor Department Thursday morning.
Meanwhile continuing claims in the June 5 week rose 88,000 to 4.571 million, after the previous week was revised up 21,000. The June 5 week’s continuing claims had initially been reported to have dropped to a low not seen since the second week of December 2008, but the latest figures restored continuing claims to trend, and except for the previous
week were the lowest only since late March.
A Labor analyst said only Oklahoma was estimated due to technical issues. States reported initial claims from manufacturing industries, construction and educational services, he said.
The reported 472,000 level was well above the Market News International survey median of 453,000 and yet, the Labor analyst said, should not have been that much of a surprise. Initial claims usually do surge in the week following a federal holiday and the seasonal factors expected an 8.4% rise of 33,000. Instead there was an 11.1% surge of 44,000 but still, the analyst said, in the range of what was to be expected.
The seasonal factors expect a decline in claims in the coming week, the analyst said, referring only to expectations embedded in past performance, not what might happen additionally because of economic factors.
The initial claims seasonally adjusted 4-week moving declined 500 to 463,500, the lowest only since the May 29 week.
The seasonally adjusted insured unemployment rate edged back up a tenth to 3.6% in the June 5 week. It was 4.9% a year earlier.
The unemployment rate among the insured labor force is well below that reported monthly by the Labor Department because claims are approved for the most part only for job losers, not the job leavers and labor force reentrants included in the monthly report.
The Labor Department said that there were 191,103 fewer unadjusted Emergency Unemployment Compensation benefits claims in the May 29 week, lowering that category to 4,804,030. Extended benefits claims rose by 22,133 to 416,513 not seasonally adjusted.