Initial jobless claims spike to 384,000 last week
After a week that saw initial unemployment claims fall to 350,000 -- a statistical fluke economists now say -- the number soared 34,000 to 384,000 -- a sign that job growth is simply not occurring.
Economists polled by Reuters had forecast claims rising to 365,000 last week. The four-week moving average for new claims, a better measure of labor market trends, fell 1,500 to 375,500 - staying in the middle of the range it has held for much of 2012.
"The snapback in the pace of claims should not be particularly surprising as last week's favorable seasonal unwinds," said Millan Mulraine, senior macro strategist at TD Securities in New York.
"However, we believe that the current level of initial jobless filings overestimates the true pace of jobless claims, and should see claims fall back to around 370,000 in the coming weeks."
Claims data is volatile in July because of the timing of the annual auto plant shutdowns for retooling.
Automakers have not embarked on wholesale plant shutdowns this year, throwing off the model the department uses to smooth the data for typical seasonal patterns.
An official with the department said it was still experiencing volatility related to the auto layoffs that usually happen at this time of year.
U.S. Treasury debt prices trimmed losses after the report, while the dollar fell against the euro.
Last week's claims data covers the period for the July payrolls count. The four-week average of new claims dropped 12,000 between the June and July survey periods, suggesting a modest improvement in nonfarm payrolls.
Anything near 400,000 claims is considered dangerous because at that number, the economy is usually losing jobs. The fact that the labor situation is not improving should make the Obama campaign very nervous as Americans have all but lost faith in the president to deliver on the economy.