The number of people filing for first time unemployment benefits rose sharply in the week ending July 26th, according to the US Department of Labor. Claims jumped 44,000, to 448,000, way above expectations. Economists were expecting 398,000 new claims for the week. Today’s reading is the highest reading since April 2003.

Having witnessed extremely volatile measurements in the past few weeks, it is wise to consider the four-week moving average of initial claims, which smooths out one-time factors such as bad weather or holidays. The four-week moving average was also higher, by 11,000 in the latest week, to 393,000.

Initial claims running consistently atop the 350,000 mark would signal some weakening in the labor market. Claims above 400,000 are seen by many as a signal of recession.

See Full Report.