For the first time in five months, first-time jobless claims fell below 1 million to 963,000 for the week ending Aug. 8, while continuing claims eased to 15.5 million, Labor Department data shows. While the initial jobless claims data is moving in the right direction, we would urge caution in the over interpretation of the data. Claims will remain elevated, compared to historical levels and given the likelihood of another round of layoffs in the offing among small and midsize firms due to insufficient demand as the economy continues to slow, claims may reverse.
Based on continuing claims, the insured unemployment rate declined to 10.6%, which is above the 10.2% recorded in the July BLS employment report. During the past 21 weeks 56.3 million individuals have filed for initial jobless claims. Through the week of July 25 those on some form of aid declined to 28.2 million from 31.3 million, which is consistent with both the recall of workers and the unfortunate truth of many falling off aid rolls.
