Thursday, February 10, 2011

U.S. Initial Jobless Claims Fall More than Expected in Latest Week

Early unemployment insurance claims plunged 36,000 to 383,000 for the
week ending February 5, 2011 following the previous week's 38,000
decline to a 419,000 level (initially reported as 415,000). This
result leaves the level of early claims at its lowest level since July
of 2008. The improvement in the latest week was much larger than
market expectations for claims to fall to a 410,000 level. The
four-week moving average of early claims, which normally provides a
better indication of the underlying trend in labor markets, fell
sharply as well, to 415.5,000 from 431,500 the prior week. Continuing
claims (for the week ending January 29, 2011) dropped 47,000 to
3,888,000 from 3,935,000 last week.

The drop in the four-week moving average of early claims in the latest
week reaffirms the view that the sizeable swings in the data in recent
weeks were likely the result of shifting holiday schedules and
weather-related volatility, and that the underlying downward trend in
layoffs since the near-term spike last August remains intact. This
improvement in the claims numbers has yet to be reflected in
significantly stronger monthly payroll employment growth, with the
latest example being the poorly modest 36,000 increase in payroll
employment in January 2011. With that said, hiring in January was
likely slowed by inclement weather and, given the strength in the
employment components of the ISM releases along with indications that
the overall economic backdrop continues to improve, the decline in
early claims bodes well for employment growth to strengthen vacant

Source: ActionForex.Com

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