The Labor Department reported on Thursday that initial jobless claims for unemployment insurance, filed in the week ending Aug. 2, rose a seasonally adjusted 7,000 to 455,000 from the previous week’s unrevised figure of 448,000. The layoff filings came in worse than analysts consensus of 420K.
While this is the highest level of jobless claims in over six years, there is an overlooked prime detail in today’s report as noted by USAToday.
The new layoff figures were distorted by an outreach program to notify people that they could qualify for additional benefits under a new law. When people went to state claims offices to apply for extended unemployment benefits, state officials discovered that some were eligible — but had not filed — for their initial unemployment benefits, a Labor Department analyst said. That accounted for some of last week’s increase.
The Labor Dept. did not give any specifics as to how many claimants were added as a result of this program, nor did it elaborate on how long the distortion would last. Leading to the assumption that several thousands of people are now on the unemployment payrolls who otherwise would be finding a job, consequently making the current reported figures non-accurate. Nevertheless, the fact is the labor market remains soft ; for how long however — is anyone’s guess.
The Labor Dept. also reported — advance number for seasonally adjusted insured unemployment during the week ending July 26 was 3,311,000, an increase of 31,000 from the preceding week’s revised level of 3,280,000.
The fiscal year-to-date average for seasonally adjusted insured unemployment for all programs is 2.975 million.
In other news: The National Association of Realtors [NAR] said June pending home sales did not fall as much as anticipated. Sales rose 5.3% month-over-month, versus an expected decline of 1.0%.
Lawrence Yun, NAR chief economist, said: “the rise in pending home sales was broad-based with all four regions showing gains. This is welcome news because a rise in contract activity is necessary for an overall housing recovery. With a tax credit now available to first-time home buyers, increases in home sales could be sustained with the momentum carrying into 2009”.
With increases noted in all four regions, Northeast (+3.4%), Midwest (+1.3%), South (+9.3%) and West (+4.6%), sales gains are a hopeful sign for the depressed housing market.