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Jobless Claims Data Poor on Both Fronts
Other labor reports indicate the labor market improved in August compared to July, but the level of jobless claims indicates otherwise. The average weekly number of claims in July was 560k, whereas the 4-week average in August was 571,250, a two-month high. The weekly average was slightly worse as new claims in the prior week got revised up 4k to 574,000. rnrnSo contrary to most forecasts, these figures indicate that the economy will be lucky if tomorrow’s employment situation report comes in better than July.
Stocks Higher Before Labor, Consumer Data
Looking ahead to today, the key releases concern the labor market and consumer spending, two areas crucial to any hopes of a V-shaped recovery. So while markets have been somewhat indifferent to fresh data recently, weekly employment claims and the ISM Services indexes should definitely grab attention. rnrnUnfortunately, that attention won’t be a good thing. According to forecasts, new claims for jobless benefits are expected to remain above 550k per week, and the services index is expected to be in decline for the 11th straight month.
Jobs Data, Productivity, Factory Orders, FOMC Minutes
Equity futures are pointing slightly higher this morning, but the gains are far from comforting considering the S&P 500 slid 2.2% yesterday, led by 5.3% tumble in financial stocks.rnrnPositive data in nationwide manufacturing, auto sales, and newly signed contracts for home sales yesterday weren’t enough to alter widespread sentiment that the 5-month rally in markets had overheated, but there’s plenty of data this morning that looks likely to try again. Analysts expect the ADP private jobs survey to report moderating losses in August, while productivity gains in the second quarter may be revised up, and factory orders are set to
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