Three weeks of moderating jobless claims have come to an end as initial claims for unemployment benefits rose 17,000 to 551k in the week ending September 26.
Forecasters were expecting 537k claims. The weekly figures can be volatile so it’s no real surprise, only disappointment that another downward surprise was not in store. The prior week’s level, revised up 4k to 534k, was the lowest since early July.
The good news was that continuing claims ― the tally of those still receiving benefits ― fell 70k to 6.090 million.
“The outlook for 2H-2010 economic growth crucially hinges on an end to net job cuts over the coming three months,” said John Herrmann, president of Herrmann Forecasting. “Extremely powerful productivity growth suggests this could happen, but a jobless recovery coupled with a failure to expand credit would muffle real GDP growth in 2H-2010 – in such a case, the upside to stock valuations may be more muted.”
Even with this week’s climb, the 4-week average moved down to 548k. That suggests tomorrow’s employment report will show moderating job losses in September, as the weekly average for August was 569k.
"The 4-week moving average peaked at 659k in April so the 100k+ decline since then is noteworthy and consistent with what should be a more noticeable improvement in payrolls,” said Joseph LaVorgna, chief US economist at Deutsche Bank.
The market forecast for Friday’s report is for 170,000 jobs to have been lost in the month, compared to 216,000 in August. Forecasts could change after 10am when the closely watched ISM survey of manufacturing conditions is released.
Forecasters were expecting 537k claims. The weekly figures can be volatile so it’s no real surprise, only disappointment that another downward surprise was not in store. The prior week’s level, revised up 4k to 534k, was the lowest since early July.
The good news was that continuing claims ― the tally of those still receiving benefits ― fell 70k to 6.090 million.
“The outlook for 2H-2010 economic growth crucially hinges on an end to net job cuts over the coming three months,” said John Herrmann, president of Herrmann Forecasting. “Extremely powerful productivity growth suggests this could happen, but a jobless recovery coupled with a failure to expand credit would muffle real GDP growth in 2H-2010 – in such a case, the upside to stock valuations may be more muted.”
Even with this week’s climb, the 4-week average moved down to 548k. That suggests tomorrow’s employment report will show moderating job losses in September, as the weekly average for August was 569k.
"The 4-week moving average peaked at 659k in April so the 100k+ decline since then is noteworthy and consistent with what should be a more noticeable improvement in payrolls,” said Joseph LaVorgna, chief US economist at Deutsche Bank.
The market forecast for Friday’s report is for 170,000 jobs to have been lost in the month, compared to 216,000 in August. Forecasts could change after 10am when the closely watched ISM survey of manufacturing conditions is released.
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