US initial jobless claims holds firm at 1.4m as continuing claims reverses higher to 17m

Although initial US jobless claims were better than the median forecast of 1.45m, this week’s print of 1,434,000 represented an increase of 12,000 on last week’s revised figure. The message is clear. The US economic recovery is sputtering and stalling and needs an injection of stimulus soon.

The top three largest rises in initial claims (filed during the week ending 25^th July) were in the states of Virginia (+8,578), Nevada (+6,125) and Indiana (+2,698). While the top three largest falls in initial claims filed were California (-40,587), Georgia (-37,732) and Florida (-21,914).

The adjusted insured unemployment rate rose 0.5% to 11.6% for the week ending 18^th July, which was unwelcome news especially considering that economists heralded the 0.7% decrease in the insured unemployment rate in the week ending 11^th July.

As you can from the chart below, the insured unemployment rate had been trending down from the middle of March, however, today’s data marked a reversal in the trend (the broken blue line is the weekly figure whilst the brown line is a moving average).

The latest data on the insured unemployment rates by state (latest data is as of w/e 11^th July) showed Puerto Rico with the worst unemployment rate at 24.6%, followed by the second-worst Nevada at 22% and Hawaii with 21% as the third-worst state its terms of unemployment. The latter two states’ figures could be reasonably linked with uncharacteristically low levels of tourism spend.

Finally, turning to the aggregate measure of jobless claims, continuing jobless claims, this rose by 867,000 to 17,018,000 for the week ending 18^th July, which almost completely wipes out the impressive 1,107,000 decline that was seen for the week ending 11^th July and confirms a stagnant US labour market.