INSTANT VIEW: U.S. weekly jobless claims at 16-year high
NEW YORK (Reuters) - The number of U.S. workers filing new claims for jobless benefits rose by a larger than expected 27,000 last week to their highest level in 16 years, Labor Department data showed on Thursday, as a harsh economic environment forces employers to cut back on hiring.
KEY POINTS: * Initial claims for state unemployment insurance benefits were a seasonally adjusted 542,000 in the week ended November 15 from a revised 515,000 the previous week. * A Labor Department official said there were no special factors influencing the report. * Analysts polled by Reuters had forecast 505,000 new claims versus a previously reported count of 516,000 the week before. * The four-week moving average of new jobless claims, a better gauge of underlying labor trends because it irons out week-to-week volatility, rose to 506,500 from 490,750 the week before, the highest since the start of 1983. * Continuing claims were 4.012 million in the week ended November 8, the latest data available, up from 3.903 million the prior week and the highest since December 1982.
COMMENTS:
PETER KENNY, MANAGING DIRECTOR AT KNIGHT EQUITY MARKETS IN JERSEY CITY, NEW JERSEY:
"They're awful, they're bad. They point to significant weakness in trends. The problem is not the gross number alone, but coupled with what is the solution coming from Washington. So you have a terrible trend coupled with people coming off benefit roles."
ALAN RUSKIN, CHIEF INTERNATIONAL STRATEGIST, RBS GREENWICH CAPITAL, GREENWICH, CONNECTICUT:
"Initial claims data lays on the misery. For the dollar, I am disinclined to fight the risk aversion trade. There are too many fires to put out - a variety of US financial institutions in the spotlight and an auto sector crying for help with time working against it."
VASSILI SEREBRIAKOV, CURRENCY STRATEGIST, WELLS FARGO, NEW YORK:
"Anxiety about the financial markets is shifting to anxiety about fundamentals and the real economy, and that's keeping the overall levels of risk aversion very high. We've had disappointing U.S. economic data with the jobless claims number and we believe the bear market in equities will continue, lending more support to the dollar and yen."
STEPHEN GALLAGHER, CHIEF U.S. ECONOMIST, SOCIETE GENERALE, NEW YORK:
"They are high, it is a bit of a holiday week but that usually depresses the numbers not inflates them. The message is one of weakness for the non-farm payrolls report -- this does coincide with the survey timing for that report. So we will be looking for ongoing weakness, somewhere between 250,000 and 300,000 jobs lost for the month. It is the same sort of dire picture. We know that all the numbers are extremely bleak for the fourth quarter and what we really need is some sense of whether there is any bounce. The economy sort of went into a freeze after mid-September for various reasons, financial mostly. We are just not in the right time period to see that type of evidence of a bounce. We are about a month away from seeing any signs of a potential bounce."
ELLIOT SPAR, MARKET STRATEGIST, STIFEL NICOLAUS & CO, SHREWSBURY, NEW YORK:
"They were harder than expected, but where's the surprise? Everyday we hear about more layoffs so there's no surprise. The news will move the market lower, sure, but whatever you throw at the market moves it lower. Even if it's good news, it doesn't hold. It's a bear market."
CARY LEAHEY, ECONOMIST, DECISION ECONOMICS, NEW YORK:
"This report paints a pretty bleak job picture for mid-November and reinforces the comments from the Fed yesterday almost guaranteeing a sizable Fed rate cut at the next Fed meeting on December 16. It means we're probably facing another payroll employment report showing November job losses in the vicinity of 200,000."
CARL LANTZ, U.S. INTEREST RATE STRATEGIST AT CREDIT SUISSE IN NEW YORK:
"Obviously they were really weak. This is a new high, consistent with a very sharp slowdown in the labor market."
"It looks like we'll have another ugly payroll number in December. No rest for the weary."
MARKET REACTION: STOCKS: U.S. equity index futures fall further. BONDS: Treasury debt prices add to gains. DOLLAR: U.S. dollar extends losses against yen.
