Continuing unemployment claims remain high - a negative for U.S. economy

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Borrowing a phrase from the Fab Four, it was a hard day's night for the dedicated statisticians at the U.S. Labor Department in our nation's capital. While initial jobless claims dipped, continuing claims remained at an alarming level.

Initial jobless claims fell 31,000 to 639,000 for the week ending February 28, the Labor Department announced Thursday, below the 650,000 economists surveyed by Bloomberg News had expected.

The four-week moving average rose 2,000 to 639,750. Any initial jobless claims level above 600,000 indicates weak job market conditions.

High continuing claims

Meanwhile, U.S. continuing claims dipped 14,000 to a 5,106,000 Americans -- a mark just below the highest level since record keeping for the statistic began in 1967.

Economists note that the high continuing claims level reflects labor market stress and the long time it takes for those downsized to find comparable employment. Few companies are filling vacancies, rather, many major corporations have announced large lay-offs. Even temporary work assignments are declining in another negative sign for the labor market and the economy.

Economic Analysis: An inline jobless claims report, but again, investors need to keep in mind that when jobless claims are at these elevated levels, a status-quo report is a negative for the U.S. economy and for the U.S. stock market.

The only time this statistic will 'make news' is when both continuing claims and the four-week moving average for weekly claims trend lower. Right now, the U.S. economy is nowhere near that condition.
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