According to the Labor Department, initial jobless claims rose by 21,000 to 248,000 in the week ended Aug. 5. This marks the highest level since the week ended July 1. Economists polled by The Wall Street Journal had estimated that new claims would rise by 5,000 to 231,000. It’s worth noting that last week’s claims rose by 6,000 to 227,000, with no changes made to the initial estimate.
Key Details
In contrast to the increase in initial jobless claims, the number of people already collecting jobless benefits fell by 8,000 to 1.64 million. Continuing claims have been declining since reaching a high of 1.86 million in mid-April.
Big Picture
Despite the recent increase in initial jobless claims, it is important to note that they still remain well below their late spring peak. This suggests that the economy is gradually stabilizing after a rocky period in mid-2022 when gasoline and food prices surged. Bill Adams, the chief economist for Comerica Bank, expressed confidence in this trend, stating that the decrease in both initial and continued jobless claims indicates a positive trajectory for the economy.
Market Reaction
In response to the consumer price inflation data released on Thursday, stocks (DJIA SPX) were expected to open higher. Additionally, the yield on the 10-year Treasury note (BX:TMUBMUSD10Y) reached 4%.
