Jobless Claims: Week of September 21

TRADEX GLOBAL INTERNAL COMMENTARY

The number of new jobless claims came in “slightly” lower than the week before and higher than consensus.  The week ending September 8th was also revised up 3k to 378k.  The four-week moving average (which is more important) moved up to 378k.  The Labor Department believes that this is a clean number and is not distorted by Tropical Storm Isaac.  I can only say that we are not going fast enough in the right direction to get unemployment down!  QE1 & QE2 did not help create enough jobs and we highly doubt that QE3 will either.  The Fed is set to buy more MBS than are available (maybe that is the new math norm?).  If that has a positive effect on the jobs numbers, I will really be surprised.  Keep very nimble – Michael Beattie

EXTERNAL RESEARCH COMMENTARY

The number of U.S. workers filing applications for jobless benefits remained elevated last week, showing that the labor market is still struggling to sustain improvements. In a separate report, the Conference Board's index of leading economic indicators fell 0.1% in August, suggesting little momentum for the U.S. economy. Initial jobless claims, a measure of layoffs, were down by 3,000 to a seasonally adjusted 382,000 in the week ended Sept. 15, the Labor Department said Thursday. But claims for the week ended Sept. 8, which were revised up to 385,000 from an initially reported 382,000, were elevated because of business closures after Hurricane Isaac, the Labor Department said. Last week's figure is above expectations. Economists surveyed by Dow Jones Newswires forecast 373,000 new applications for jobless benefits last week. The four-week moving average of claims - which smooths out weekly data - increased by 2,000 to 377,750. That is the highest level since the week ended June 30. A Labor Department economist said there was nothing unusual about the most recent week's data. In the prior week, about 9,000 additional claims were a result of the storm that hit several Gulf Coast states and Puerto Rico in late August, he said. Layoffs trending higher is likely a concern to Washington policy makers. Federal Reserve officials continue to closely monitor the employment data and said last week the central bank would start buying $40 billion of mortgage-backed securities—with the goal of lowering interest rates—every month until the job market improves. "The idea is to quicken the recovery to help the economy begin to grow quickly enough to generate new jobs and reduce the unemployment rate," Fed Chairman Ben Bernanke said at a news conference. The claims report Thursday showed the number of continuing unemployment-benefit claims—those drawn by workers for more than a week—dropped by 32,000 to 3,272,000 in the week ended Sept. 8. Continuing claims are reported with a one-week lag. The number of workers requesting unemployment insurance was equivalent to 2.6% of employed workers paying into the system in the week ended Sept. 8. The rate has remained constant since mid-March. Meanwhile, the Conference Board said its leading index fell 0.1% last month after a revised 0.5% gain first reported as 0.4%. The index has fallen in three of the last six months as the recovery has struggled for traction. Economists surveyed by Dow Jones Newswires expected the index to be unchanged. "Weak domestic demand continues to be a major drag on the economy," said Ken Goldstein, an economist at the board. In August, only four of the 10 leading indicators increased. Stock prices were among the positive indicators. For the second month in a row, the biggest negative was the new-orders index compiled by the Institute for Supply Management. The board also said its coincident index increased 0.1% in August after an unrevised 0.3% gain in July. The lagging index increased 0.2% after a revised 0.3% advance, first reported as 0.4%.

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