U.S. Initial Claims correct lower but trend continues to rise
Initial claims at 235k are lower than expected and down by 17k from last week’s 250k, which was the highest since August 5 2023. The fall more than fully reverses a preceding 15k increase though the 4-week average of 240.75k is the highest since August 26 2023.
Last week’s rise was exaggerated by seasonal adjustments, with the unadjusted data falling by 9k to 217k. This week also saw unadjusted claims fall, by 14k to 203k. The survey week for August’s non-farm payroll is still two weeks away.
Continued claims, covering the week before initial claims, rose by 6k to 1.875k, and the highest level since November 2021, though only because last week was revised down from 1.877k.
Before seasonal adjustment continued claims fell by 23k to 1.911m.
The message remains of a labor market gradually losing momentum and consistent with rising unemployment, but with no sign of a sharp slide into recession. Fears over Friday’s payroll data look overdone.
