Ninth consecutive missing in the Weekly Initial Jobless Claims
While we are preparing to have the US July Nonfarm Payrolls the latest data from US labor markets are not in favor of investors and economists.
Starting from JOLTs Job Openings numbers in June show that the labor market already offers fewer vacancies with only 10.698M compared with 11.303M in May and being above 11M in recent months. At the same time, detailed numbers show that layoffs also increasing, which means employers are less interested in new hires. On the flip side, despite the recent decrease, resignations are still so high, which shows enough confidence in finding a better-paid job among employees.
As every Thursday, today we had the weekly employment report of jobless claims. According to the Labor Department report, the number of US citizens claiming jobless benefits continued to increase for the ninth week in a row, with initial claims seen at their seven-month high.
As labor Department report shows, the initial claims rose to 260,000 from a downwardly revised 254,000 in the previous week. It is also the highest record since January. With these increases in initial claims, the four-week average also hit a nine-month high of 254,710. Continuing claims on the other hand sharply increased to 1.416 million as its highest number since March, suggesting that t least some employees are finding it harder to get a new job after losing or resigning from their previous jobs.
And now, it is expected that the US Bureau of Labor Statistics (BLS) for the July jobs report on Friday, August 5, expect a 250,000 rise in Nonfarm Payrolls following the 372,000 increase in June.
Reviewing the Employment Index of the ISM Manufacturing and Services PMI reports below 50 in July also pointing the weakness in the labor market growth. However, the unemployment rate should stay unchanged at 3.6%, and average hourly earnings should increase steadily at 0.03%, same as the last month.
If we see the number weaker than expected, or even in line with expectations, it means that the labor market is getting weaker, so FED will be less interested in having aggressive policies, and it will have a somehow positive reaction in the stock markets and negative reaction in the US Dollar chart. On the flip side, strong results or severe weakness that confirm the recession, must be positive for the currency, and negative for the US stock markets.
