Initial Jobless Claims Jump in JulyThe labor market saw another apparent setback last week as initial jobless claims unexpectedly surged by 19,000 to 479,000, a three-month high, the Labor Department announced Thursday. However, in reporting the numbers, the department cautioned that the initial jobless claims statistic can be especially volatile during July and August, due to the normal, seasonal auto company and industrial shutdowns that take place over the summer.

According to a Bloomberg survey, economists had expected initial jobless claims to total 455,000.

Economists prefer to focus on the more telling four-week moving average, which also jumped by 5,250 to 458,500, as it smooths out anomalies in the data caused by holidays, strikes, and weather-related layoffs. Meanwhile, continuing claims fell by 34,000 to 4.54 million.

Monster Job Index Also Dips

Separately, the Monster (MWW) Employment Index also fell 3 points to 138 in July -- its first month-to-month decline in more than a year, Monster.com announced Thursday. However, Monster was careful to note that the index, a measure of employers' intentions to hire, has declined from June to July during every year since 2003, due to a routine summer hiring dip. What's more, the index is still up 21% -- or 24 points -- compared to July 2009. Also, Monster said all 28 metro areas it tracks showed increases in jobs posted online, on a year-over-year basis.

Returning to the jobless claims report, a year ago, initial jobless claims totaled 559,000, the four-week moving average stood at 559,750, and continuing claims totaled 6.19 million.

Initial jobless claims will need to drop below 400,000 before economists and most investors will have confidence that commercial activity is increasing at a pace that will prompt most companies to curtail layoffs and resume hiring.

States also reported 3.31 million persons claiming Emergency Unemployment Compensation benefits for the week ending July 17, the latest period for which data is available, an increase of 60,993 from the prior week.

The highest insured unemployment rates for the week ending July 17, the latest for which data is available, were in Puerto Rico, 7.2%; Pennsylvania, 5.3%; Oregon, 4.8%; Massachusetts, 4.7%: New Jersey, 4.7%, and California, 4.6%.

This week's initial jobless claims total was unusually high, but again, investors should keep in mind the volatility associated with the usual summer industrial shutdowns: That factor likely skewed the stat higher. Should initial claims remain at current levels into September, that would be a clear sign of weakening labor market conditions.

Investors also should not assume that this week's jobless claims report presages that the July nonfarm payroll report, scheduled to be released at 8:30 a.m. Friday, will also be be poor. The two reports are not strongly correlated. That payroll report is expected to show a gain of 100,000 private sector jobs, after excluding the loss of about 170,000 temporary U.S. Census jobs.

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Dawnie

One thing not talked about is the massive unemployment tax increases on business who have had to lay off people. These additional taxes will be a burden for years and will further put a crimp on any new hiring until their rate comes back down. I see most employers hiring only freelance in order to avoid this in the future.

August 05 2010 at 9:28 PM Report abuse +2 rate up rate down Reply
xonon1

HOW MANY MORE OF THESE "SURPRISES" CAN AMERICA TAKE???

August 05 2010 at 9:20 PM Report abuse +3 rate up rate down Reply
RTST1986

The reason continuing claims are 1.65 million less than a year ago is that jobless benefits have been exhauasted for millions of unemployed people, thus their claims are not "continuing". Alot of those people are still unemployed. The article fails to mention this significant factor.

August 05 2010 at 7:39 PM Report abuse +3 rate up rate down Reply
socialeconomist

450,ooo jobs lost per week x 52 weeks = ????????

August 05 2010 at 5:52 PM Report abuse +1 rate up rate down Reply
1 reply to socialeconomist's comment
socialeconomist

sorry forgot to add enough ???????????????????????????????????????????

August 05 2010 at 5:53 PM Report abuse +2 rate up rate down Reply
Meadhh

Lies, lies and more lies as Obama runs around city to city gloating on how well his stimulus has saved jobs. Yeh, Yeh, Yeh. VOTE HIM AND HIS ADMINISTRATION OUT OF OFFICE OR WE ARE DOOMED!!!!

August 05 2010 at 5:46 PM Report abuse +4 rate up rate down Reply
pevchamp

WHY DOES ..THE WHITE HOUSE LIE ABOUT OUR ECONOMY....COME NOV....I HOPE WE CLEAN OUT THAT MESS ...

August 05 2010 at 4:42 PM Report abuse +6 rate up rate down Reply
lauracrepeau

Ford appears to be in process of closing all of its Lincoln stores, now that the Mercury line has ended. That has to be having an impact on new unemployment claims across the country.

August 05 2010 at 4:01 PM Report abuse rate up rate down Reply
KKiegiel

Jobless claims will continue. On CNBC, Sybase CEO actually said that they are hiring overseas, but not here in the USA. When commentator wanted to elaborate on the overseas hiring, but not US hiring, CEO totally avoided question and talked about micro and macro economics.

August 05 2010 at 1:51 PM Report abuse +1 rate up rate down Reply
fielectric

We've given our manufacturing base away to China. We get little ripple effect for stimulating the economy by massive government spending. Maybe a few distribution centers and transportation modes get stimulated, but that doesn't create the jobs that the Keynes economic theory predicts. The world has changed since Keynes but our govt still uses his theory to "tune" the economy. There in fact may be a negative multiplier when the govt. spend a buck to stimulate. Unless manufacturing starts to grow again, the country will continue to decline and will be more and more difficult to dig out. Exempt the first million dollars of profit from taxes, and watch what small business can do to reverse the trend. Also look at tariffs. We have allowed almost unlimited access to our markets to foreigners, while they still impose high tariffs to our exports.

August 05 2010 at 1:46 PM Report abuse +1 rate up rate down Reply
NailerOne

"UNEXPECTED" man you guys just like kicking sand on the down trodden which is pretty brutal really. There is no doubt that President "0" and his 2 evil stepchildren, Ben "Beanhead" Bernanke and Timmy "The Tax Cheat" Geithner are making a very bad situation worse. "Lookout Below"

August 05 2010 at 1:45 PM Report abuse +2 rate up rate down Reply