There’s nothing pretty about this morning’s jobless claims report.
Claims jump 13,000 to 472,000 in the week ended June 26. The previous week’s level was also revised upward, from 457,000 to 459,000. And all this comes as economists had expected claims would fall by 2,000.
“This is unquestionably a negative, even more so we as we see the Southern states that might be affected by the oil spill not accounting for a large uptick in claims,” Miller Tabak’s Dan Greenhaus writes.
As we mentioned in the opener, a Labor Department economist blames the latest rise on the educational services sector, where bus drivers, cafeteria workers and others lost their jobs due to the summer holidays.
What a crock of … I mean, c’mon. Think about it, the school year coming to an end isn’t some brand new phenomena; it happens every year at the exact same time. Isn’t seasonally adjusted data supposed to take these sort of situations into account?
It also seems like the Labor Department always has an excuse in its back pocket whenever there’s an “unexpected” rise in jobless claims. Remember in early April when the increase in claims was attributed to Cesar Chavez Day? Really?
“These are not normal times, there is not large demand for labor and as such, people whose benefits are going to run out will simply not have the spending power necessary to help drive growth,” Greenhaus adds. “This necessitates a slightly more bearish outlook for growth in the third quarter.”
Delving deeper into the data shows total unadjusted continuing claims for workers collecting more than one week from state, extended and emergency benefits fell to 9.23M in the June 12th week, from 9.60M the week before.
A silver lining? Not quite. Don’t read much joy into the decline — much of it was in the emergency program, which lapsed after the Senate did not act, so long-term workers are exhausting their eligibility and falling off the rolls.
“Bottom line, following the weak private sector job growth seen in yesterday’s ADP report, today’s initial claims data continues to point to a lackluster labor market and another jobless recovery,” says Peter Boockvar, also of Miller Tabak.
(Paul Vigna and Kathleen Madigan contributed to this post.)