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August 21st, 2008 (Modified on August 25th, 2008)

Weekly Claims Drop, 4 Week Avg. Still High



Initial jobless claims dropped by 13,000 to 432,000 for the week ending August 16, down from 445,000 (revised) from the week ending August 9. Despite two steady weeks of drop offs, the four-week moving average of jobless claims has reached its highest level in nearly seven years. According to Bloomberg.com, initial claims have averaged 445,750 since the end of July, the highest level since December 2001. So far this year, weekly unemployment claims have averaged 53,000 more than they did last year.

High unemployment rates will continue to put a strain on consumer spending. Last week’s reports on inflation (CPI, import and export costs) won’t be any help either. Yet, if unemployment claims drop again in the next two weeks, the four-week moving average, a more consistent, less volatile gauge of the unemployment market, will continue to remain at recessionary levels, but will reveal a rare consistency to this shaky consumer market.

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One Response to “Weekly Claims Drop, 4 Week Avg. Still High”

  1. Rebecca Wilder Says: August 21st, 2008 at 1:53 pm

    I tend to think that you are right, that the deterioration in the labor market has worsened slightly. But there are likely still distortions created by the emergency unemployment compensation program (EUC http://www.workforcesecurity.doleta.gov/unemploy/supp_act.asp) in the pipeline. However, since it has been several weeks since the singing of the bill (June 30, 2008), those distortions are probably smaller than previously thought. This federal EUC program has made what was already a statistically difficult report to forecast, the employment report, more difficult. Who knows what will happen when the BLS reports the August payroll on September 5. Will it be -25k, or will it be -200k…nobody knows.

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