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The claims situation is slowly improving

Claims fell more than expected in the latest week, to a level (453K) that is a bit below the average for the year to date (465K). It's now clear that the unexpected swings in the index that occurred in July and August were the result of faulty seasonal factors (i.e., the actual numbers didn't behave as the seasonals had expected). The underlying trend in the labor market has been large unchanged this year, and that is a move towards very gradual improvement.

This chart shows the actual, unadjusted claims number, which has been clearly trending down all year. Importantly, it is now below the levels that prevailed at this time two years ago. Normally, actual claims would be moving higher at this time of the year, but so far that hasn't happened.

As this last chart shows, the biggest change in the claims situation has been the significant decline over the course of the year in the number of persons receiving unemployment insurance. That number has fallen by 3.75 million since the high at the beginning of this year. It's likely that at least some portion of this decline has occurred because some people are finding jobs. According to the household survey, some 1.8 million new private sector jobs were created in the first 8 months of this year. The improvements in claims to date suggests that next week's jobs number could hold some more pleasant surprises for the market.

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