US jobless claims surged last week, as 419,000 Americans filed for unemployment benefits.
That was 51,000 more than the previous week’s upwardly-revised print.
Consensus was looking for just 350,000 on the headline initial claims number, so the actual read marked a significant miss. It was also the highest since May (figure below).
The four-week moving average rose to 385,250.
Continuing claims were 3.236 million in the week to July 10. That too was a disappointment. The market was looking for 3.1 million.
Pandemic Unemployment Assistance claims jumped nearly 14,000 last week. Ongoing PUA and PEUC claims were 5,133,938 and 4,134,716, respectively, on July 3. Those figures were down fairly sharply, leaving “just” 12.5 million Americans receiving some kind of benefits.
Ultimately, the WoW rise in initial claims was the most since March (figure below).
The range of estimates for initial claims was 335,000 to 375,000. 419,000 was thus a significant upside surprise. And “upside” is obviously a bad thing in this context.
While it would be foolish to make too much of noisy weekly claims figures, it was difficult to put a positive spin on this week’s report. Instead, it seemed to underscore the notion that labor market frictions remain.
Not that anyone needed further evidence (figure above).
Read more: The Big Benefits Question
I would take this report with a large grain of salt, and as you point out it is a one week number. And I am not as bullish as most over the near term.