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Jul 20, 2012, 05.32 PM IST
Mecklai graph of the day: This week, applications for jobless benefits increased by 34,000 to 386,000 over the prior week’s revised figure of 352k, reflecting volatility induced by the annual auto-plant retooling period.
Unemployment claims indicates the number of individuals who filed for unemployment insurance for the first time during the past week. A fall in numbers indicates that hiring is strong enough to reduce the unemployment rate.
This week, applications for jobless benefits increased by 34,000 to 386,000 over the prior week’s revised figure of 352k, reflecting volatility induced by the annual auto-plant retooling period. Determining whether the labor market is improving or deteriorating has been more difficult in recent weeks because a reduction in the number of auto-plant layoffs typical at this point of the year has thrown the Labor Department’s seasonal adjustment process out of line. The Labor Department adjusts the number of applications for unemployment aid to account for seasonal factors. The adjustment process expected a decrease of about 7 percent in unadjusted claims. Instead claims rose about 2 percent.
Although it's generally viewed as a lagging indicator, but it’s an important signal of overall economic health because consumer spending is highly correlated with labormarket conditions.
Despite the fact that it may take weeks for the labor department to gauge the correct direction, a consistent higher unemployment rate will add to jitters of the Federal Reserve and may prompt it to provide some additional stimulus measures in the near future.
The below graph shows the United States jobless claims for the past 11 weeks.
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Jun 18 2013, 22:39
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Jun 18 2013, 22:39
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