US weekly unemployment claims unexpectedly rise

The number of Americans filing new unemployment claims rose last week, reaching 243,000. This increase, however, might be partially due to seasonal factors such as summer breaks and temporary factory shutdowns, which typically make July data typically noisy.

Initial claims for state unemployment benefits rose by 20,000 to a seasonally adjusted 243,000 for the week ended July 13, US Labour Department data showed on Thursday.

Claims fell in the prior week, pulling further away from a 10-month high reached in early June.

The four-week moving average of claims, which helps smooth out week-to-week fluctuations, also rose slightly. However, the insured unemployment rate remained unchanged at 1.2% for the week ending July 6th.

Unadjusted Data:

The unadjusted data, which is not seasonally adjusted, showed a larger increase in claims. This could be partly due to factors like school vacations and temporary factory closures.

Data on the number of people receiving benefits after an initial week of aid, known as continuing claims, will be released next week. This data will provide a clearer picture of the labour market’s health in July. Financial markets are currently anticipating interest rate cuts later this year, which could potentially ease pressure on the labor market.

Overall, while the rise in jobless claims is worth noting, it’s important to consider the potential impact of seasonal factors. The broader trend points towards a cooling labour market in response to the Fed’s tightening monetary policy.

Attribution: The US Labour Department data