Jobless Claims: Reply Hazy, Ask Again
The Magic-8 Ball Oracle that is the jobless claims report continues to confuse me.
Reuters:
Jobless Claims Fall, But Auto Numbers Cloud Picture: The number of U.S. workers filing new claims for jobless benefits fell sharply last week to the lowest level since January, the government said on Thursday, but the data was distorted by an unusual pattern of automotive industry layoffs that amplified the drop. Initial claims for state unemployment insurance fell 47,000 to a lower-than-expected seasonally adjusted 522,000 in the week ended July 11, the Labor Department said. Analysts polled by Reuters had forecast claims to be unchanged at 565,000 last week.
A Labor Department official said that far fewer layoffs than anticipated based on past experience in the automotive sector and elsewhere in manufacturing accounted for both the large drop in seasonally adjusted claims last week and in the very steep decline in so-called continued claims. This was the second week in a row that seasonal factors had affected the data and the official said this would continue for one or two more weeks before this influence faded. "The big drop is not necessarily a reflection of what is going on in the economy," he said...
Once again, the mid-summer spike in new unemployment insurance claims is not as large as it usually is--and the BLS interprets that as a significant improvement in the labor market. It is not clear that that is wrong. It is not clear that that is right either...
