Ominous New Joblessness Report

How bad is it?

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The Labor Department has released last week's U.S. joblessness benefit claims numbers and it's more bad news. Last week saw an additional 37,000 claims, bring the total to a seasonally adjusted 464,000 jobless workers. That's significantly above forecasts. Here's what market watchers have to say:

  • Disappointing News in Two Ways  Reuters reports that the disappointing rise in jobless more than erases the prior week's decline in joblessness. "Analysts polled by Reuters had forecast claims rising to 445,000 from the previously reported 429,000 in the July 10 week, which was revised slightly down to 427,000 in Thursday's report." So the reported numbers are significantly worse than expected.
  • Job Creation Not Returning, 24/7 Wall Street's Jon Ogg frets. "It may not be much of an economic recovery any longer, but whether it is a recovery or the turn to a double-dip recession it isn't happening for jobs. ... The continuing claims are more volatile as a week ago was a large rise. Let’s hope that this is still an aberration from recently-axes Census workers and from teachers in summer. Still, it looks and feels like the job creation is not coming back."
  • July is Always Volatile, Daily Finance's Joseph Lazzaro points out. "The Labor Department cautioned that the initial jobless claims statistic can be especially volatile during July/August, due to normal, season auto company end-of-the-model-year shutdowns to retool for next year's models, and due to other seasonal factory shut-downs."
  • Cycles of Joblessness  The Washington Independent's Annie Lowrey explains: "The sustained, high number of initial claims feeds the sustained, high jobless rate. Economists say initial claims need to fall into the 300,000s to demonstrate job growth and to spark a drop in the overall unemployment rate. Claims have remained around 450,000 since the beginning of the year."
  • Weekly Data Like This Not Always Useful, The Big Picture's Peter Boockvar writes, breaking free from the pack. "The distortion of the seasonal auto shutdowns that didn't happen at GM combined with the July 4th holiday has made the initial claims portion of the data too cloudy to analyze week to week and we thus should average the prior couple of weeks." Unfortunately Boockvar's strategy yields the same bad news.
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