Huge Drop in Weekly Jobless Claims, with a Big Caveat
The U.S. Labor Department has released its count on weekly jobless claims, and the report shows a stellar drop of 30,000 to 339,000. The prior week was revised higher to 369,000 from 367,000 originally reported. Dow Jones was looking for this latest weekly claims figure to come in at 365,000 and Bloomberg was looking for 370,000.
To smooth out the report, the four-week average was down to 364,000 and the army of unemployed measured by the continuing claims (with a one-week lag) fell by 15,000 down to 3.273 million.
With so many analysts, economists, market pundits, journalists, traders and political figures fighting over how valid the drop to 7.8% from 8.1% unemployment, today's jobless report may matter more than many will give it credit for. That being said, Dow Jones pointed out that one large state did not report additional quarterly figures that were expected, and this may be a substantial portion of that decrease.
We would wait for a smoothing out of this data before making any final decision about how one weekly number would influence the markets.
JON C. OGG