The US Department of Labor (DoL) reported that initial unemployment claims for the week ending July 5 were up 5,000 to 439,000 from a revised 434,000 the previous week. It was the second consecutive weekly initial claims gain with the total now at a five-week high. The government also reported last week that the nation’s June unemployment rate shot up to 6.4% from May’s 6.1%, representing its highest level since April 1994 (See Jobless Claims Spike Higher For Week, Month ).
In a testament to the stubbornness of the market downturn, Thursday’s report also marked the 21st consecutive week that claims have been over the 400,000 level – a widely accepted benchmark, which economists say separates job growth from loss. The department said it was the longest string of weeks with claims over the 400,000 level since a jobs market downturn that ended in July 1992.
The four-week average of initial claims, which irons out short-term volatility, rose by a slight 1,000 to 426,750 from a revised 425,750.
Not only were more people lining up for first-time claims, the existing unemployment insurance rolls bulged. DoL said Thursday that the number of unemployed workers continuing to get benefits jumped by 87,000 to 3.82 million in the June 28 week, the highest level since February 1983.
In a Reuters report, a DoL aide cautioned against relying too heavily on the latest initial claims figure in gauging the jobs market, noting the auto plant shutdowns for annual retooling could be affecting the figures.
Wall Street economists participating in Reuters’ regular poll had expected claims to edge down a bit to 425,000 from the 430,000 originally reported for the week ending June 28.