Jobless Claims Week Ended July 2, 2010 (With Graphs)

The initial claims level declined from 475,000 for the week ending June 26 to 454,000 for the week ending July 3. The Briefing.com consensus estimate was 460,000.

The four-week moving average has stayed between 460,000 and 470,000 since the end of May as one week's downward move is quickly reversed during the following week. Briefing.com anticipates that this will continue over the next several weeks.

At 4.413 mln, continuing claims dropped to its lowest level since November 2008 and handily beat the consensus estimate of 4.600 mln. However, the move does not point to payroll gains and instead is most likely due to an increased expiration rate.

More importantly, the emergency benefit level has been in a free fall over the past several weeks as the level dropped 367,948 for the week ending June 19, which is in-line with last week's announcement that 3.3 mln emergency benefits are scheduled to expire by the end of July.

Unless Congress can agree to extend the emergency benefits payouts, we could see a significant decline in income in both June and July. Since jobless benefits have been a major source of income stability over the past several months, the lost benefits will have adverse effects on our consumption forecasts.