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 4/3/08 For wk 3/29 2008 | ||||||||||||
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Highlights
In a very bad sign for the economy, initial jobless claims posted a 38,000 spike in the March 29 week to 407,000 for the worst reading since Hurricane Katrina in September 2005. Continuing claims confirm trouble, up 97,000 to 2.937 million in data for the March 22 week and the highest reading since mid 2004. The Labor Department did not point to any specific events, such as the American Axle strike, but did note that seasonal adjustments surrounding Easter are volatile. The four-week average for initial claims is now at 374,500 for the highest level since October 2005.
The sudden leap over the 400,000 level is certain to send a chill through the financial markets where new doubts over the health of tomorrow's employment report are likely to surface. The dollar and Treasury yields both fell in immediate reaction to the data. The ISM's non-manufacturing employment index, part of the ISM's 10:00 a.m. ET release this morning, will offer the next clue on tomorrow's report.
Initial jobless claims improved in the week ending March 22, dipping 9,000 to 366,000 despite what looks to be strike-related auto claims in Michigan, Ohio and Missouri. The latest level is near the four-week average of 358,000 which is up from the roughly 350,000 level through February. Nonetheless, jobless claims indicate a somewhat soft labor market but one that is nowhere near what one might expect given all of the recession talk and the extended weakness in housing and now a probable contraction in manufacturing. Claims bear watching as a rise would suggest that employers expect economic weakness to be long rather than short.
Jobless Claims Consensus Forecast for 3/29/08: 366,000
Range: 360,000 to 386,000
![[Chart]](chart.gif)
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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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