Jobless Claims Break 400K for First Time this Cycle
As I've been saying, all this focus on preserving the financial system from implosion is taking away attention from the other major issues - the recession. I'm sorry... "the minor, shallow, and gone in 6 months slowdown".
Weekly jobless claims finally breached the level that all of Wall Street's Kool Aid drinkers cannot explain away, the magical 400K level. What does that mean for tomorrow's job report? First, the weekly job claims from this week will be reflected in April's report - second, the monthly labor report is a work of fiction so it can say whatever they want it to say. (
Apr 2: The Underemployment Rate is Rising). Weekly jobless claims is a straightforward report so there cannot be much fiction writing in this one...
- The number of new people signing up for unemployment benefits last week shot up to the highest level in more than two years, fresh evidence of the damage to a national economy clobbered by housing, credit and financial crises.
- The Labor Department reported Thursday that new applications filed for unemployment insurance jumped by a seasonally adjusted 38,000 to 407,000 for the week ending March 29. The increase left claims at their highest point since Sept. 17, 2005, following the blows of the devastating Gulf Coast hurricanes.
- "This report supports the view that the jobs market is deteriorating toward recessionary conditions," said T.J. Marta, a fixed-income strategist at RBC Capital Markets
- The latest snapshot of labor activity was worse than economists had anticipated. They had predicted claims would be much lower, around 365,000.
- Still, looking at the longer-term trend there was little doubt of the pickup in unemployment filings. A year ago, new claims stood at 319,000.
- Meanwhile, the number of people continuing to collect unemployment benefits rose by a sharp 97,000 to 2.94 million for the week ending March 22, the most recent period for which that information is available. That was the highest since July 17, 2004.
Now remember, in Kool Aid world you explain away this number by blaming it on Easter or American Axle layoffs or whatever you wish. Funny, how holidays never seem to ruin the numbers during economic expansions but are a wonderful excuse during downtimes.
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