Weekly Claims Drop, 4 Week Avg. Still Highby Tim Manni
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.