Again we saw the number of people applying for new U.S. unemployment benefits drop by 10,000 in the week ending March 9th. 332,000 initial claims were filed versus expectations for close to 350,000.
Continuing claims, which represent those already receiving benefits and lag by an additional week also declined by 89,000 to a seasonally adjusted 3.02 million for the week ended March 2.
Last week's initial claims reading is the second lowest in 5 years and is commensurate with the strength we have seen in the BLS and ADP reports over the last few months.
Initial claims from two weeks ago were revised up by 2,000 from an original reading of 340,000, based on more complete data collected at the state level.
Last year at this time, 362,000 new claims were filed and as you can see by the chart below, the unemployment claims trend has been on the decline since 2009. It is important to note that for the last 3 years we have seen both unemployment claims rise after March and into the summer and the S&P 500 drop at that very same time.
Being the cautious and skeptical bull that I am (one who also studies and believes in seasonal patterns) I do see unemployment claims rising back up into the summer time and the S&P 500 moving lower. Perhaps we won't see the 10% correction, but I think history will repeat itself in both instances. Sandy may intensify this effect with the boom in temporary employment and sales that she generated in Q1.
Do you think the same trend or something different this year?
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