Instant View: Jobless claims fall in latest week

NEW YORK (BestGrowthStock) – The number of U.S. workers filing new applications for unemployment insurance fell as expected last week, a government report showed on Thursday, while those continuing to receive benefits dropped to the lowest level in over a year.

KEY POINTS: * Initial claims for state unemployment benefits dropped 29,000 to a seasonally adjusted 469,000 in the week ended February 27, down from an upwardly revised 498,000 the prior week, the Labor Department said. * Analysts polled by Reuters had expected claims to drop to 470,000 from a previously reported 496,000 the prior week. * Initial claims data in recent weeks has been distorted by bad weather, making it difficult to gauge the labor market trend. * The four-week moving average of new claims, which irons out week-to-week volatility, fell 3,500 to 470,750, the Labor Department said. * The number of people still receiving benefits after an initial week of aid dropped 134,000 to 4.5 million in the week ended February 20, the lowest since early January 2009. * The insured unemployment rate, which measures the percentage of the insured labor force that is jobless, slipped to 3.5 percent in the week ended February 20 from 3.6 percent.

COMMENTS:

PETER BOOCKVAR, EQUITY STRATEGIST, MILLER TABAK + CO, NEW YORK:

“Because of the bad snow storms and disruption that resulted in the data, it’s best to average these weeks in order to get a better handle on the trend. The 4-week average is now 471,000 vs. 474,000 last week but above 470,000 for a second straight week for only the first time since late Nov/early December Continuing claims fell but extended benefits rose. Thus, there is still very little evidence in this weekly, timely data, of any big pickup in hiring outside of some modest improvement. Tomorrow’s Feb payroll figure will also be impacted by the weather.”

JOHN CANALLY, INVESTMENT STRATEGIST, ECONOMIST, LPL FINANCIAL, BOSTON:

“The claims data right in line shouldn’t really move the market that much, you are still 200,000 below the peak a year-ago now but really stalled since the beginning of December. It’s not clear if the stall in the drop in claims is weather or something else, it might be another couple of months before we figure that out. Four-week average at 470,000 is consistent with some job growth but not a lot, you are just kind of bouncing along here.

“If you look at the continuing claims drop, but the emergency claims are up. That is people exhausting their regular benefits and moving to the extended benefits, so that is not a good sign. If you add all those things up, any kind of claims you can receive, those peaked a couple of months ago. That suggests the unemployment rate is close to peaking as well. This set you up for tomorrow’s jobs report and what impact the weather is going to have.”

LINDSEY PIEGZA, MARKET ANALYST, FTN FINANCIAL, NEW YORK:

JOBLESS CLAIMS: “It resumed the improving trends we had been seeing. This seems that weather had played a big part in interrupting that trend.”

“There was also a big drop in continuing claims. It shows that hiring plans by companies had been in place since late last year. That said, however, going into tomorrow, we could be seeing still the effects from seasonal adjustments and weather conditions.”

KEVIN CARON, MARKET STRATEGIST, STIFEL, NICOLAUS & CO, FLORHAM PARK, NEW JERSEY:

“Claims was about as in-line as in-line can be, so no market reaction. No big revisions either. Continuing claims were off a little relative to expectations, and they’re inching down, but that’s just a function of benefits ending. So nothing is market moving.

“The productivity move is historically standard for the fourth-quarter, so I don’t see anything notable there.”

MARKET REACTION: STOCKS: U.S. stock index futures remain flat after jobless claims data. BONDS: U.S. Treasury debt prices little changed. DOLLAR: U.S. dollar holds gains versus euro.

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Instant View: Jobless claims fall in latest week