U.S. initial jobless claims unexpectedly rise
Further, continuing claims, the number of Americans receiving unemployment benefits, also rose 29,000 to 6.74 million. Economists surveyed by Bloomberg News had expected this week's initial jobless claims to total 610,000. Meanwhile, the 4-week moving average was virtually unchanged, increasing just 500 to to 617,250.
Economists view the 4-week average as a better indicator of unemployment conditions, as it smooths-out anomalies for strikes, holidays, or other idiosyncratic events.
Andrew Gretzinger, a senior economist with MFC Global Investment Management in Toronto, is encouraged by the downward trend in jobless claims, but investors should not conflate that trend with job creation.
"Job losses are going to continue," Gretzinger told Bloomberg News Thursday. "Maybe they will slow to some degree, but a resurgence of hiring is some ways away."
Further, provided initial jobless claims resume their decline in the weeks ahead, that would be the best news for the U.S economy since the recession started. It would not signal net job growth, but jobless claims declines point to a day when aggregate demand starts to rise -- a commercial condition the nation hasn't experienced in more than a year.
Economic Analysis: A mild increase in jobless claims, but one that should not alarm investors. As noted, initial jobless claims are volatile, which is why economist emphasis the 4-week moving average and the overall trend. And that trend remains down. Simply, if jobless claims have peaked and repeatedly fall month after month, that would be the best news for the U.S economy since the recession started.