Filing for initial jobless claims, a gauge of weekly layoffs, increased by 10,000 to a seasonally adjusted 354,000 for the week. The prior week’s figure was upwardly revised to show 4,000 more claims than originally reported. Economists were expecting little movement in the number of new claims, predicting 341,000 on average for the week.
The four-week moving average, regarded as a better barometer of labor market trends because it eliminates weekly volatility, rose by 6,750 to 347,250. The one-month average has been trending near five-year lows. The hike will raise concerns with economists that maybe the jobs market isn’t strengthening quite as much as hoped. The figure is approaching the 350,000 mark that economists call consistent with moderate jobs growth.
The Memorial Day holiday on Monday may have impacted results as well as it shortened the time frame for states to report the claims data. Five states were estimated in this week’s report. Virginia and Wyoming provided estimates on their own, while claims were estimated by the Labor Department for Hawaii, Minnesota and Oregon.
Continuing claims, those people who have already been collecting jobless benefits, rose by 63,000 to 2.986 million for the week ended May 18. Continuing claims are reported with a two-week lag.
The total number of people claiming benefits in all programs, which include extended benefits from the federal government after traditional benefits are used, declined by 166,659 to 4.579 million for the week ended May 11. Total claims are reported at a three-week lag.
Analysts and economists are closely monitoring jobs data to evaluate when the Federal Reserve may put the brakes on its $85-billion-per-month in purchases of Treasuries and mortgage-backed securities. The easing efforts have been largely attributed for the Dow Jones and S&P 500 steadily punching through to new record levels. Fears of the Fed slowing its stimulus policies have been on a short-list of reasons that the markets have had down days in recent months.
In a bit of backwards reaction, the markets do not seem to mind the worse-than-expected jobs data or a separate report from the Commerce Department showing the economy grew less than previously estimated in the first quarter. According to that report, GDP increased by 2.4 percent in the January through March period, down from the 2.5 percent initially reported in April. Realistically, neither piece of data was too horrific, but softer data increases the odds of QE3 continuing longer…and the markets like that idea.
Shortly into Tuesday’s trading session, the Dow Jones Industrial Average is up by 64 points, the S&P 500 is ahead 9 points and the tech-heavy Nasdaq has risen 23 points.
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