Jobless Claims Lend Support To U/E Rate Rise Partly Being Down To Weather

A surprisingly large hawkish reaction to weekly jobless claims data that show little sign of an improvement in underlying terms, but do at least rule out a very latest deterioration for the labor market.

• Initial jobless claims were lower than expected in the week to Aug 3, at a seasonally adjusted 233k (cons 240k) as they retreated from a slightly upward revised 250k (initial 249k).
• Markets have got very excited by the surprise lower but it’s important to not put too much weight on the individual weeks which can swing about.
• Instead, the four-week average has continued to trend higher to 241k (+3k) for a fresh high since Aug 2023.
• Texas continues to retrace its Hurricane Beryl hit, down another -4.8k but still slightly above cyclical norms – see chart.
• Continuing claims meanwhile were as expected at 1875k in the week to Jul 27 after a downward revised 1869k (initial 1877k).
• There’s not much new to say on the claims data, with their NSA values still right at the top of the range for pre-pandemic years but the market is reacting to no signs of further labor market deterioration here.