The Labor Department has just released its latest round of weekly jobless claims. This was a huge reduction to a level that is finally under 600,000. The number came in at a revised -52,000, down to a reading of 565,000. Bloomberg had a consensus estimate last seen of some 610,000 after a preliminary report last week of 614,000 on an unrevised basis. Before thinking this is absolutely the end of 600,000 and higher in the reports, keep in mind that last week was a holiday week and is one of the most traveled weeks of the year.
On the continuing jobless claims by those in the benefits line more than one week, that actually came in much higher with a gain of 159,000 to 6,883,000. The number last week was down 53,000 to 6,751,500.
The four-week average came down by 10,000 to 606,000.
This does give more ammunition for those looking for green shoots, but the notion that this is good is still misguided. We have been told by more than one economist that these weekly claims and that continuing claims number have to come down much lower before it translates to an improvement in the unemployment rate.
Equity futures were already higher before this number came out and we have not seen any spikes higher. Traders are apparently not believing that this is anything other than a holiday-induced anomaly.
Jon C. Ogg
July 9, 2009
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