US Initial Claims remain very low, Q2 Current Account deficit increases but narrower than expected
Initial claims at 197k remain very low with last week (the survey week for September’s non-farm payroll) revised up to 198k from 196k. Continued claims, covering the week before initial claims at 1.719m are marginally up from 1.717m, but last week was revised from 1.730m, and is now a sharp 48k fall.
The low level of claims is a little more persuasive than last week’s data which came in a week that included the Labor Day holiday. The 4-week average at 202.25k is at a 6-week low.
The continued claims 4-week average of 1.744m is the lowest since June 2023 and suggests the payroll acceleration of August may be sustained. The latest continued claims data covers the payroll survey week.
The Q2 current account deficit of $246.0bn is up from $212.6bn in Q1 but narrower than expected and back near pre-tariff levels. A wider goods deficit and a fairly stable services surplus (after Q1 was revised higher) were as suggested by monthly trade data.
The two unrealised components of the deficit however saw narrowing deficits. The primary (investment) income deficit dell to $11.4bn from $15.8bn, while the secondary (transfers) deficit fell to $24.8bn from $38.0bn. The firmer is in line with recent trend but the latter is the narrowest since Q2 2021.
