July 2020 Initial Unemployment Claims 1,314,000 This Week

Market expectations for weekly initial unemployment claims (from Econoday) were 1,150 K to 1,380 K (consensus 1,330 K), and the Department of Labor reported 1,314,000 new claims. The more important (because of the volatility in the weekly reported claims and seasonality errors in adjusting the data) 4 week moving average moved from 1,500,250 (reported last week as 1,563,250) to 1,437,250

Analyst Opinion of Initial Unemployment Claims

According to the BLS:

The COVID-19 virus continues to impact the number of initial claims and insured unemployment. This report includes information on claimants filing Pandemic Unemployment Assistance

The pandemic has so far caused a 50,261,000 job loss. Likely more half of this number are now employed or have dropped out of the workforce as the continuing claims number is 18,062,000]. Of the 1,314,000 jobs lost this week, the BLS says 1,038,905 were due to the coronavirus (versus 996,842 last week).

It should be pointed out that Econintersect watches the year-over-year change in the 4-week moving average. There is always some seasonality that migrates into the seasonally adjusted data, and year-over-year comparisons help remove some seasonality. The four-week rolling average of initial claims is 556 % higher than one year ago (versus the 578 % higher last week).

 

Claim levels before the coronavirus pandemic were at 40-year lows (with the normal range around 350,000 weekly initial unemployment claims of levels seen historically during times of economic expansion - see chart below).

 

States with the Biggest Increases in Unemployment Due to Coronavirus

Source: WalletHub

From the Department of Labor:

In the week ending July 4, the advance figure for seasonally adjusted initial claims was 1,314,000, a decrease of 99,000 from the previous week's revised level. The previous week's level was revised down by 14,000 from 1,427,000 to 1,413,000. The 4-week moving average was 1,437,250, a decrease of 63,000 from the previous week's revised average. The previous week's average was revised down by 3,500 from 1,503,750 to 1,500,250.

The advance seasonally adjusted insured unemployment rate was 12.4 percent for the week ending June 27, a decrease of 0.5 percentage point from the previous week's revised rate. The previous week's rate was revised down by 0.3 from 13.2 to 12.9 percent. The advance number for seasonally adjusted insured unemployment during the week ending June 27 was 18,062,000, a decrease of 698,000 from the previous week's revised level. The previous week's level was revised down by 530,000 from 19,290,000 to 18,760,000. The 4-week moving average was 19,085,500, a decrease of 636,000 from the previous week's revised average. The previous week's average was revised down by 132,500 from 19,854,000 to 19,721,500.

Continued claims give a good idea of the real unemployment levels as some unemployed would have found another job.