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(CEP News) - Following two weeks of weaker-than-expected initial claims figures, economists' forecasts are divided for Thursday's jobless claims report from the Department of Labor. The consensus looks for 360k initial claims in the week ending July 19, but forecasts from the 44 economists surveyed range widely from 365k to 440k.
"Claims are often distorted during July by seasonal layoffs in the car industry so it may take several weeks to assess any important changes in the developing trend," said Dave Resler, chief economist at Nomura Securities. In the week ending July 5, initial claims unexpectedly dropped 56k from the prior week, followed by a smaller-than-expected 18k gain in last week's report. Prior to the 56k drop, claims had been above 380k for four consecutive weeks, provoking fears of a bigger downturn as a consistent weekly claims level above 400k is commonly considered to be recessionary. The four-week average now stands at 377k. RDQ economists said "it is notoriously difficult to seasonally adjust jobless claims in early July, due to the volatility associated with auto plant retooling shutdowns, it will take several more weeks of data to be able to determine the true trend in this data series." Joseph LaVorgna, chief U.S. economist at DeutcheBank, said the volatility in July jobless claims is leading him to lean more heavily on other payroll predictors, such as withholding tax receipts. Continuing claims have been on a steady rise in recent months, hitting the eleventh week in a row above the three million mark in the last report at 3.122 million. The consensus expects that figure to fall back to 3.160 million in the week ending July 12, a number still above the four-week moving average of 3.143 million. The rise in continuing claims suggests the labour market is weakening on both fronts, as people who have lost their jobs are finding it difficult to find new employment. By Patrick McGee,
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