Jobless claims: 432,000, down 12,000

U.S. jobless claims were down 12,000 this week to 430,000. However, the 4-week average increased to 445,750 and is now 125,750 higher than a year ago. Over the past 4 or 5 weeks, claims have spiked up in part due to the extension of unemployment benefits. Therefore, it won’t be clear how weak the data are until we move into September and October

Continuing Claims were 3,362,000, which was down 17,000 from the week before. Nevertheless, as with initial claims, the 4-week moving average is up, registering 3,330,250, which is 66,250 more than last week and 775,500 more than at this time last year.

The data are consistent with a weak labor market. It is still unclear, however, what this will mean for the unemployment number in September as the data have been skewed by the extension of benefits.