Highlights
Jobless claims are spiking, driven in part by efforts to seek out those who qualify for benefits and very likely by businesses cutting back on their labor forces. Initial jobless claims did fall back 10,000 in the Aug. 9 week, but to a still much higher-than-expected level of 450,000 (432,000 expected). Market News International reports that the Labor Department is uncertain whether the effects of the emergency employment compensation program have or have not peaked. Initial claims in the Aug. 2 week hit 460,000 with the current four-week average at 440,500 -- both the highest readings since the beginning of the expansion.

Continuing claims, up 114,000 in the Aug. 2 week are more clearly signaling deterioration in the labor market. At 3.417 million, continuing claims are the highest since November 2003. Early indications for August are pointing to an eighth straight month of payroll decline. The results are likely to limit increases underway this morning in Treasury yields and the dollar, the result of hotter-than-expected consumer price data.