Initial Jobless Claims Fall 18K

Strong and welcome strength is the signal from jobless claims which are at historic lows and trending lower. Initial claims fell a very sharp 18,000 to 259,000 in the June 18 week -- which is the same week that the government sampled its monthly employment report. The 259,000 for the June sample week compares with 278,000 in the May sample week for a 19,000 decrease while the 4-week average, currently at 267,000, is down 8,750. These are sizable differences that hint at solid improvement for the June employment report.

Continuing claims are sending the same signal, down 20,000 in lagging data for the June 11 week to a 2.142 million level that is 18,000 below the month-ago comparison. The 4-week average, at 2.147 million, is down 5,000 in the latest week and is 4,000 lower than a month ago. The unemployment rate for insured workers is unchanged at a very low 1.6 percent.

Initial claims are putting in their best showing since the early 1970s while continuing claims are at their best since 2000 (which for the latter is the beginning of the series). But that's history. More immediately, today's results suggest that May's 38,000 payroll gain very well may prove an outlier. There are no special factors in the data.

Recent History Of This Indicator:
Initial jobless claims are expected to sink back tightly to trend, down 7,000 in the June 18 week to a consensus 270,000. Such a result would point to strength for the June employment report. Note that the June 18 week is also the sample week for the monthly employment report.