Low inventories in the auto sector are pushing back summer shutdowns for factories which badly cloud jobless claims data for the July 7 week. Initial claims fell 26,000 to 350,000 with the 4-week average down roughly 10,000 to 376,500. As summer shutdowns do begin, this improvement will presumably reverse to some degree.
Continuing claims in data for the June 30 week fell slightly to 3.304 million with the 4-week average up slightly to 3.309 million which is the highest level in 2-1/2 months. The unemployment rate for insured workers has been stuck at 2.6 percent for 3-1/2 months.
The fact that the Labor Department is pointing to seasonal distortions, tied again to the timing of summer retooling, pushes back any conclusions that the jobs market is improving. Initial reaction to today's report is limited.
Market Consensus before announcement
Initial jobless claims fell 14,000 in the June 30 week to 374,000 which was well under Econoday expectations for 386,000. In a small offset, the prior week was revised 2,000 higher to 388,000 which however is still 4,000 lower than the prior week. The four-week average, at 385,750, was down slightly for a second straight week. Still, the average's trend versus a month-ago was not favorable and showed a 5,000 to 10,000 increase. Improvement for continuing claims, like that for initial claims, has stalled. Continuing claims in data for the June 23 week rose 4,000 to 3.306 million with the four-week average down 3,000 to 3.304 million.