U.S. jobless claims fall to 550,000, beats expectations but still high

August 6, 2009 by · Leave a Comment
Filed under: Economic News 

On the radio this morning I kept hearing this statistic cited as a sign of a recovery for the U.S. economy.  I am sorry but just because we only had 550K jobs lost instead of 580K is no reason to break out the Dom Perignon and celebrate.  These numbers are still very bad and I expect earnings to fall in the 3rd and 4th quarter and that will be primarily driven by a reduced consumer demand that directly ties into unemployment.  Why do these “green shoots” keeping looking like weeds?

News (Reuters):

The number of laid-off U.S. workers submitting new claims for jobless benefits fell sharply last week, fanning hopes the fragile labor market was on the mend and that the broader economy was stabilizing.

Initial claims for state unemployment insurance fell 38,000 to a seasonally adjusted 550,000 in the week ended August 1, the Labor Department said on Thursday, beating market expectations for a drop to 580,000.

In a sign that the trend was firmly toward a moderation in the pace of layoffs, the four-week moving average for new claims fell 4,750 to 555,250 in the week ended August 1.

The four-week moving average is considered a better gauge of underlying trends as it irons out week-to-week volatility. The moving average has declined for six consecutive weeks.

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