U.S. initial unemployment insurance claims rose 4,000 in the week ending August 18, following an upwardly revised 368,000 (was 366,000) level the previous week. The increase in the latest week left the level of claims above market expectations for a 365,000 reading. The four-week moving average of initial claims rose to 368,000 from 364, 250 the previous week. Continuing claims inched up 4,000 to 3.317 million in the week ending August 11 following a 23,000 drop to 3.313 million the previous week.
While initial claims have inched higher for two consecutive weeks, the gains have been relatively modest and, following earlier declines, the four-week moving average in the latest week, which also happens to coincide with the August payroll employment survey week, is still well-below previous survey week readings of 376,000 in July, 387,500 in June, and 375,500 in May.
This is still consistent with respectable growth in payroll employment in August following a stronger-than-expected 163,000 gain in July that marked a notable improvement from the modest 73,000 average monthly gain in the second quarter. Our forecast assumes payroll employment growth will average close to 150,000 per month over the second half of 2012 as a whole.
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