US Unemployment Claims Rise But Trend Still Positive

The number of Americans filing new claims for unemployment benefits rose last week, but the underlying trend pointed to a continuing strengthening of labor market conditions.

Other data on Thursday suggested a long-awaited acceleration in wage growth was imminent, with labor costs recording their largest increase in more than 5-1/2 years in the second quarter.

Initial claims for state unemployment benefits increased 23,000 to a seasonally adjusted 302,000 for the week ended July 26, the Labor Department said. Claims for the prior week were the lowest since May 2000.
 
“Unemployment claims have come down a lot as of late and suggest that labor market conditions continue to improve,” said Yelena Shulyatyeva, an economist at BNP Paribas in New York.

The four-week average of claims, considered a better gauge of labor market trends as it irons out week-to-week volatility, fell 3,500 to 297,250, the lowest level since April 2006.

Summer automobile plant shutdowns for retooling cause volatility in claims around this time of the year as automakers sometimes keep assembly lines running. This throws off a model the government uses to adjust the data for seasonal variations.

via Reuters

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza