US jobless claims remain above 1m; Q2 GDP revised touch better
The number of Americans filing for unemployment benefits fell slightly last week after an unexpected increase the week before, but remained above 1 million.
According to figures released on Thursday by the Labor Department, US initial jobless claims declined by 98,000 from the previous week’s revised level to 1,006,000. Analysts had been expecting a drop to 1m. The previous week’s level was revised down by 2,000.
Meanwhile, the four-week moving average fell by 107,250 to 1,068,000. The previous week’s average was revised down by 500 to 1,175,250.
The four-week average is considered more reliable as it smooths out sharp fluctuations in the more volatile weekly figures, giving a more accurate picture of the health of the labour market.
Ian Shepherdson, chief economist at Pantheon Macroeconomics, said: "The weekly initial claims numbers are noisy but the underlying trend probably is still falling, albeit slowly.
"We had hoped that claims would be well under one million by now, but the second Covid wave scuppered that idea. Note that claims for Pandemic Unemployment Assistance rose by a hefty 83,000 this week, but the data are unadjusted and volatile. Still, to see total new claims, regular and PUA, running at 1,603K is depressing."
Separate figures released by the Commerce Department showed that on an annualised basis, GDP for the second quarter was revised up a touch to a 31.7% contraction from the 32.9% contraction previously reported. Still, this marked the worst quarterly plunge on record as the Covid-19 pandemic took its toll.
Shepherdson said: "This is all ancient history now; what matter is the extent of the H2 rebound. Base effects mean that a big double-digit jump in GDP is baked-in for Q3, but we are becoming increasingly worried about the fourth quarter, given the softness of much of the near-real-time data."