Instant view: Weekly jobless claims rise unexpectedly

NEW YORK Thu Sep 23, 2010 8:57am EDT

NEW YORK (Reuters) - New claims for unemployment benefits rose unexpectedly last week, government data showed on Thursday, highlighting continued labor market weakness.

KEY POINTS: * Initial claims for state unemployment benefits increased 12,000 to a seasonally adjusted 465,000, the Labor Department said, breaking two straight weeks of declines. * Analysts polled by Reuters had forecast claims unchanged at 450,000. * The government revised the prior week's figure up to 453,000. * The four-week average of new jobless claims, considered a better measure of underlying labor market trends, fell 3,250 to 463,250, the lowest since July 31. * The number of people still receiving benefits after an initial week of aid dropped 48,000 to 4.49 million in the week ended September 11 from an upwardly revised 4.54 million the prior week. * Analysts polled by Reuters had forecast so-called continuing claims slipping to 4.46 million from a previously reported 4.49 million.

COMMENTS:

SUBODH KUMAR, CHIEF INVESTMENT STRATEGIST, SUBODH KUMAR &

ASSOCIATES, TORONTO:

"Equities have been behaving as if the economy was getting stronger, which is not happening. I think we are in a trading range, but short-term the markets are going to shed this belief of a stronger recovery.

"Equities probably will pull back a little bit here. The S&P 500 is well above 1,100 and a few weeks ago it was close to 1,050 and I think there's room for that kind of pullback."

YELENA SHULYATYEVA, ECONOMIST, BNP PARIBAS, NEW YORK:

"We were expecting an increase following the week of Labor Day, and actually on a non-seasonally adjusted basis claims increased by 38,000. That was large enough to push the seasonally adjusted claims up 12,000. So the increase was bigger than the seasonal factors suggested.

"Nevertheless the four-week moving average has declined in the week ending September 18... As we know September 18 is the week of the September payrolls survey so it's a pretty good decline in claims and so we should expect a moderate improvement in the payrolls in September.

"It's a very volatile series as we know and weekly series are always going up and down so I prefer to look at the four-week moving average and that has improved."

PETER KENNY, MANAGING DIRECTOR, KNIGHT EQUITY MARKETS, JERSEY

CITY, NEW JERSEY:

"They confirm there is not going to be an expansion in employment for the foreseeable future. We have an unemployment rate that is stubbornly high, that breaks with tradition in terms of there being any sort of sustainable rebound. It's just not there, the employment numbers are just not speaking to a rebound.

"The Fed's outlook confirmed the prospect of a very anemic rebound and really, flagging production, flagging demand domestically. These numbers really speak to that in a very clear way. They couldn't be more spot-on in terms of speaking to an economy that is just barely hanging on to razor thin gains."

STEVE GOLDMAN, MARKET STRATEGIST, WEEDEN & CO, GREENWICH,

CONNECTICUT:

"The data is a little bit weaker than expected. Again we were better over the last couple of weeks so we are ebbing and flowing as far as economic reports. Actually the past few weeks of economic reports have been better than expected.

"For the markets the S&P (futures) were down 9, now down 10 so it's only down fractionally after the data. We still have growth, albeit it's small. We're not double dipping, we are in a slow growth period."

GUY LEBAS, CHIEF FIXED INCOME STRATEGIST, JANNEY MONTGOMERY

SCOTT, PHILADELPHIA:

"Jobless claims prove a little weaker-than-expected. Clearly the labor market will be very slow to improve. One of the biggest reason why companies are reluctant to hire is uncertainty, not so much political uncertainty as it is being touted but because of the lack of faith that revenue and profitability could be sustained going forward."

MARKET REACTION: STOCKS: U.S. stock index futures extend losses after rise in weekly jobless claims. BONDS: U.S. Treasury debt prices add to gains. DOLLAR: U.S. dollar extends declines versus yen.

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Comments (4)
GLS4Freedom wrote:
I am sure glad that the recession is all over with. Gee, why did unemployment go up again????

Sep 23, 2010 10:55am EDT  --  Report as abuse
allthecash wrote:
I’s amazing how bad economic indicators are always classified as “unexpected”.

It really gives you a warm and fuzzy feeling that these economists know what they’re doing.

Sep 23, 2010 11:51am EDT  --  Report as abuse
we’ll probably find out 6 months from now that we’ve already double-dipped and re-recovered!!!

Sep 23, 2010 11:56am EDT  --  Report as abuse
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