Jobless Claims Data Poor on Both Fronts

Investors already wary of a slow recovery won’t want to see today’s labor market release. The weekly jobless claims report showed there were 570,000 new claims for unemployment benefits last week, while the continuing claims figure jumped up 92k to 6.324 million.

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. 

So contrary to most forecasts, these figures indicate that the economy will be lucky if tomorrow’s employment situation report comes in better than July.

“The claims data, combined with a worse-than-expected ADP employment figure, points to no improvement, if not some deterioration, in August nonfarm payrolls compared with July’s -247,000 print,” noted Sal Guatieri from BMO Capital Markets.

It is worth noting that the payrolls report tomorrow will not include data from August 15 onwards, but that doesn’t mean the jobs weren’t lost â€