U.S. Jobless claims drop by 20,000 as hurricane impact fades

October 9, 2008 by · Leave a Comment
Filed under: Economic News 

Updated: 5:00pm EST

You would think that this is a good thing and the market would have a short rally but instead at the time of this writing the Dow is down 670 points or over 7%. I think my call of 7,000 Dow and 800 S&P is becoming more of a reality each day.

Press Release:

The number of U.S. workers filing new claims for jobless benefits fell 20,000 last week, in line with forecasts, as the impact of hurricanes Gustav and Ike eased, government data on Thursday showed.

Initial claims for state unemployment insurance benefits declined to a seasonally adjusted 478,000 in the week ended Oct 4 from a revised 498,000 the prior week, the Labor Department said. It was the lowest reading since mid-September, but claims remain at levels indicating a weak U.S. employment climate.

“The overall message is that the labor market remains quite weak. We know claims have been boosted by the storms, but the trend remains sharply up and the economy is deteriorating,” said Anna Piretti, senior economist at BNP Paribas in New York.

Analysts polled by Reuters had forecast 478,000 new claims versus a previously reported count of 497,000 the week before.

U.S. Treasury debt prices pared losses after the claims data, U.S. equity index futures held their gains and the dollar was steady at lower levels against the euro.

“It is estimated that the effects of Hurricane Gustav in Louisiana and the effects of Hurricane Ike in Texas added approximately 17,000 claims to the total,” the Labor Department said in a statement. The previous week it estimated the hurricanes contributed 45,000 claims.

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