New unemployment claims are compiled weekly to show the number of individuals who filed for unemployment insurance for the first time. An increasing (decreasing) trend suggests a deteriorating (improving) labor market. The four-week moving average of new claims smoothes out weekly volatility. Why Investors Care
| Released on 1/31/08 For wk 1/26 2008 | ||||||||||||
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Highlights
A holiday shortened reporting week made for a violent seasonal distortion in weekly jobless claims which soared 69,000 to 375,000 for the Jan. 26 week -- the worst level in more than two years. A Labor Department analyst told Market News International that seasonal factors surrounding the Martin Luther King holiday (Monday, Jan. 21) resulted in what the analyst described as the "eye popping" result. The result moves the four-week average to 325,750, a rise in the week of more than 10,000. Continuing claims also increased, up 47,000 to 2.716 million in data for the Jan. 19 week.
These results really scramble the outlook for tomorrow's employment report. Prior improvement in initial claims were pointing to solid payroll growth, a result now in question despite special factors surrounding the latest data. Treasury yields and the dollar fell in immediate reaction to the report.
Initial jobless claims continue to portray a robust labor market as initial jobless claims slipped 1,000 in the week ending January 19 to 301,000. There were no special factors in the week. But if the economy is headed into recession, a rise in claims will likely be an early warning signal.
Jobless Claims Consensus Forecast for 1/26/08: 318,000
Range: 310,000 to 340,000
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Weekly series fluctuate more dramatically than monthly series even when the series are adjusted for seasonal variation. The 4-week moving average gives a better perspective on the underlying trend. |
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