Highlights
More and more Americans are on unemployment relief, due to lingering effects of Gulf Coast hurricanes but more importantly to weakening economic conditions. The level of first-time claims came in at 497,000 in the Sep. 27 week vs. an upward revised 496,000 in the prior week (493,000 previously reported). The four-week average is at 474,000. The Labor Department estimates hurricane effects added 57,000 to the latest total. If it weren't for this special factor, the nearly 500,000 level would be pointing decisively at recession. Continuing claims continue to rise, up 48,000 in data for the Sep. 20 week to 3.591 million, once again a multi-year high going back to the beginning of the expansion.

The 497,000 level for first-time claims is also a multi-year high, going back further to before the recovery in the recession of 2001. Though hurricanes are adding to totals, as are government efforts to widen eligibility and length of benefits, the jobs market apparently continues to contract, which of course is the expectation for Friday's employment report for September. Financial markets showed no reaction to the report, focused instead on ECB comments following their decision to focus on inflation and hold rates steady.