Weekly jobless claims back in narrow range

Weekly initial jobless claims unexpectedly fell last week to 427,000, the lowest reading in two year.   Initial reports suggested  that the difficulty in making seasonal adjustment related to temporary shuttering of auto plants was the culprit of  the decline.

This week’s 37,000 increase to 464,000 puts claims back in the range its been since the end of last year.  And per Bloomberg News, the Labor Department is blaming factors tied to the July 4th weekend for the drop one week ago.



In the meantime, continuing jobless claims, which have recently been on a roller coaster ride, declined by 223,000 to 4.43 million.  The dip is welcome news, but the decline is more likely due to the expiration of standard benefits, rather than unemployed workers finding jobs.

Until weekly jobless claims embark on a downward trend, job creation is likely to be muted.  Additionally, the steady but elevated trend in claims is among the clearest signs that the economic recovery thus far is modest at best.