The jobless recovery continues.
Shannon Bond at the FT:
US jobless claims rise to 418,000: More Americans filed for unemployment insurance last week as the US labour market continued to struggle amid widespread uncertainty over the stalling economy. Initial claims for jobless benefits rose by 10,000 to 418,000 in the week ending July 16, the labour department said, higher than the 410,000 economists had expected. The tally included 1,750 lay-offs in Minnesota due to the state government shutdown. The four-week moving average of initial claims fell by 2,750 to 421,250.
“We are still waiting for this series to break 400,000 and make meaningful strides downward before we can truly say that the labour market is back on track,” said David Semmens, US economist at Standard Chartered. “The most worrying thing is that it’s showing an uninspiring start to hiring in the third quarter.” While many US companies are reporting strong second-quarter earnings this week, hiring is not likely to pick up until the productivity of existing workers begins to decline, Mr Semmens said.
In addition, “the distortions caused by the annual auto shutdowns at this time of year make it very hard to work out exactly what is happening,” noted Ian Shepherdson, chief US economist at High Frequency Economics. “The auto effect will fade over the next couple of weeks but in the meantime the claims numbers need to be viewed with scepticism.”