don’t panic – read the small print!

Reuters: New U.S. claims for unemployment benefits rose more than expected last week, but a decline in the four-week average to a fresh low in more than two years indicated the labor market improvement remained intact.

KEY POINTS: Initial claims for state unemployment benefits increased 18,000 to a seasonally adjusted 409,000 …. The government is expected to report on Friday that nonfarm payrolls increased 175,000 last month …. The unemployment rate is expected to have edged down to 9.7 percent from 9.8 percent in November.

Hugh Johnson, Chief Investment Officer, Hugh Johnson Advisors: “Although it’s an increase… and that might be troubling to some observers caught up in the week-to-week changes, the truth is that jobless claims continue to decline from the high of August – the four-week moving average. So jobless claims tell us we’re going to have ongoing improvement in employment numbers, and you should see that with the week’s employment data, which should show an addition of non-farm payrolls of at least 150,000. But based on the ADP report, I would be inclined to say it’s closer to 200,000.”

Zach Pandl, Economist, Nomura Securities International: Claims fell “in line with consensus forecasts and probably are consistent with the sort of healthy payrolls report that most forecasters are expecting for (Friday) …. markets in our view are looking for a very strong confirmation of the labor market rebound. We think tomorrow is going to be supportive of ongoing recovery and greater momentum in general in the economy.”

James O’Sullivan, Chief Economist, MF Global: “The net result … is still consistent with an improving labor market. This report comes two weeks after the December payroll survey so it should not have any direct bearings on that. We are still looking for 140,000 increase in December payrolls and upward revisions for the previous months.”

2 Responses to “don’t panic – read the small print!”

  1. 2 cat48
    January 6, 2011 at 4:36 pm

    Hey Chipsticks, The bobbleheads on CNBC always say if it’s under 450,000, they consider it normal turnover so they’re calling this a “good report”. Alrighty, then!

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