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New jobless claims down for third straight week, producer prices rise

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Emily McCormick joins Myles Udland and Julie Hyman to discuss the weekly unemployment numbers which matched estimates, and the factors that contributed to the producer price index reporting a higher-than-expected rise.

Video Transcript

MYLES UDLAND: Let's begin this morning's conversation with the US economy and the latest data we got on the labor market. Weekly report on initial jobless claims comes out and showed continued moderation in the number of folks filing for unemployment insurance. Yahoo Finance's Emily McCormick joins us now with the latest on this data. Emily.

EMILY MCCORMICK: [AUDIO OUT] --report on the US labor market out this morning with weekly jobless claims coming in at exactly the expected level. Those coming in at 375,000 for the week ended August 7. That was compared to 375,000 expected. Not something we've been seeing every week.

But again, still an improvement for a third straight week compared to the revised level of 387,000 that we saw during the previous period. Now, turning to continuing claims, those reported of course on a one week delay for the week ended July 31 first coming in below 2.9 million. That is another pandemic era low-- the lowest level that we've seen since March 2020. And again, pointing to more improvement in the overall level of those claiming unemployment benefits.

Now, one key metric that I do want to highlight is that the total number of individuals claiming benefits across all programs. So that includes both those regular state claims, as well as those federal augmented unemployment benefits. And those came in at just over 12 million for the week ended July 24. This represented a drop of more than 900,000 versus the prior week with that decline accelerating from the drop of 200,000 that we saw during the week prior.

Now of course, we do have economists who've been saying that the two dozen or so states that have been ending these federal enhanced unemployment benefits early would lead to some a bigger decline in this level. We have now seen that over the past couple of weeks, and likely to get a market step lower once we get that national expiration date in early September.

And then I do want to turn to one other economic data point that we got out this morning. And that is the producer price index. Now a little bit of a discrepancy here from what we got from this report compared to the more moderate. Consumer price index we got out yesterday. And we did see that, that PPI for final demand increased more than expected rising 1% on a month over month basis, and 7.8% from a year earlier in July.

Now on a year over year basis, that was the biggest rise that has ever been reported in Labor Department data going back to 2010. And that month on month increase did match the June rate of gains and was faster than the 0.6% increase expected. Now, a lot of this increase did come from the services side of the economy, especially on the trade side. We also did see energy prices actually increase as well in terms of those consumer producer price index is rather.

So clearly, as we compare the support to the one that we got yesterday, perhaps we did see that top that peak acceleration rate in terms of the consumer price increases. But this may be the top here for July, or we may continue to see a little bit of an acceleration as we work through some of these supply chain constraints on the producer side. Guys.