NEW YORK (Reuters) - New claims for unemployment benefits unexpectedly fell last week, touching their lowest level in three months, a government report showed on Thursday.
KEY POINTS: * Initial claims for state unemployment benefits dropped 21,000 to a seasonally adjusted 434,000, the lowest since the week ended July 10, the Labor Department said, and the second straight drop. * Analysts polled by Reuters had forecast claims edging up to 453,000 from the previously reported 452,000. The government revised the prior week’s figure up to 455,000. * A Labor Department official said there was nothing unusual in the state data. The economy’s painfully slow recovery from the worst recession since the Great Depression has left the labor market subdued and the unemployment rate at 9.6 percent.
DAVID ADER, HEAD OF GOVERNMENT BOND STRATEGY, CRT CAPITAL GROUP, STAMFORD, CONNECTICUT:
“This was a decent drop but with the seasonal adjustment factor at hand the drop overstates things. And even with the arcanity factor, the market is holding a bid though off from levels just before the report. Bear in mind that 434,000 is not a strong number in itself, say close to 100,000 private NFP gains if you push things, but again Labor cites the special adjustment factor so the magnitude of the drop is somewhat artificial.”
STEVE GOLDMAN, MARKET STRATEGIST, WEEDEN & CO., GREENWICH, CONNECTICUT:
“A couple of months ago we started seeing improvement in numerous gauges of employment, and we’re slowly getting that confirmation from data that’s been coming out. You tend to use moving averages on this, not just one week, but it was better than expected.”
WAYNE KAUFMAN, CHIEF MARKET ANALYST, JOHN THOMAS FINANCIAL, NEW YORK:
“Wow. It’s obviously nice to see, must be lowest in quite a while, but I won’t get too excited about one week, because one week does not a trend make. But it’s nice to see, especially since we’ve seen some negative stuff lately, including yesterday’s durable goods number. Maybe we can get back on track of having more positive numbers, but I’m not going to get too excited.
“Everything is on the election and any Fed commentary next week about QE, those are the only issues the market cares about right now.”
MARKET REACTION: STOCKS: U.S. stock index futures add to gains after the initial claims data. BONDS: U.S. Treasury debt prices trimmed gains. DOLLAR: U.S. dollar steady at lower levels versus the euro and yen
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