Jobless Claims Jump to Highest Level Since April

Jobless claims unexpectedly jumped to 324k (consensus 311k), and the prior week was revised higher by 3k to 314k. The four week moving average was 312k last week, and claims have averaged 319k on a weekly basis year-to-date. Continuing claims also rose more than expected, rising to 2523k (consensus 2500). The unemployment rate for people eligible to claim benefits held steady at 1.9%, and it closely correlates with changes in the unemployment rate.

This week's survey coincides with the June payroll survey, so the fall in job growth is worrisome for employment data, and may indicate a rise in firings. Payrolls grew above the recent trend rate in May as the unemployment rate held steady at 4.5%. New estimates are putting payroll growth for June around 100-125k vs the 157k in May. Recent studies have indicated that the unemployment rate has remained so low because fewer high school and college age students are seeking jobs than in the past.

37 states saw rising claims while only 16 saw decreases last week.