INSTANT VIEW: Jobless claims rise in latest week
NEW YORK (Reuters) - The number of U.S. workers filing new claims for jobless benefits rose to their highest in seven years due to the impact of hurricanes Ike and Gustav, the government said in a report on Thursday.
KEY POINTS: * Initial jobless claims were at 497,000 in the week ended September 27, the highest since 517,000 in the week ended September 29, 2001. * The reading was above Wall Street economists' forecasts of 475,000.
COMMENTS:
SUBODH KUMAR, CHIEF INVESTMENT STRATEGIST, SUBODH KUMAR & ASSOCIATES:
"Clearly the consumer side of the economy remains weak, these numbers address that aspect, that the economy remains weak."
NIGEL GAULT, DIRECTOR, U.S. ECONOMIC RESEARCH, GLOBAL INSIGHT, LEXINGTON MASSACHUSETTS:
"It's another high number. Clearly it's overstated by the hurricanes. They are telling us that hurricanes added about 45,000 to it. But you can take off 45,000 and you're still going to be around 450,000 jobless claims, which is high and is a recession level."
DANA SAPORTA, ECONOMIST, DRESDNER KLEINWORT SECURITIES LLC, NEW YORK:
"The Labor Department said of the week's claims, about 57,000 were weather- and storm-related. But even with that, the underlying claims reflect an upward trend in unemployment."
"The 4-week continued claims with their one-week lag has been rising to 3.5 million people. That shows those people who are already laid off are having a hard time finding a job. Today's report shows the U.S. labor market is deteriorating."
"We are looking at non-farm payrolls likely fell 130,000 in September, and the unemployment rate may settle back to 6
percent temporarily due to the teenagers going back to school from their summer job search."
"Our view is the unemployment rate will peak about 6.7 percent next year."
STEVE GOLDMAN, MARKET STRATEGIST, WEEDEN & CO, GREENWICH, CONNECTICUT:
"You had the hurricane affecting these numbers a bit. But the economic picture is going to get worse. On the other hand, that's the reason stock prices declined by 9 percent last month, so it shouldn't be too surprising to investors that the data is weaker than anticipated. The question still is whether we will can get these credit spreads down, and if so, can housing start to stabilize."
MARKET REACTION: STOCKS: U.S. stock indexes extend losses after rise in jobless claims. BONDS: Treasury prices extend gains. DOLLAR: U.S. dollar extends gains against euro after Trichet says upside inflation risks have diminished. RATE FUTURES: Show about 70 percent chance of 50 basis point rate cut in October
