Thursday, March 3, 2011

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

Early unemployment insurance claims fell by 20,000 to 368,000 for the
week ending February 26, 2011, thereby building further on the
previous week's 25,000 drop to a revised 388,000 level (initially
reported as 391,000) and marking the lowest level for claims since May
2008. The improvement in the latest week was contrary to market
expectations for claims to climb to a 395,000 level. The four-week
moving average of early claims, which normally provides a better
indication of the underlying trend in labour markets, fell for the
third time in four weeks, dropping to 388,500 from 401,250 the prior
week and diminishing below 400,000 for the first time since July 2008.
Continuing claims (for the week ending February 19, 2011) fell 59,000
to 3,774,000 from 3,883,000 last week.

The decline in the four-week moving average of early claims continues
the downward trend in the indicator evident since August 2010. This
trend was interrupted temporarily in January, reflecting the effect of
terrible weather that was likely a factor sending the level of claims
up to a near-term 457,000 peak level in the month. This inclement
weather appeared to be reflected in a 32,000 decline in construction
employment in January 2011 that limited the overall gain in private
employment to a disappointing 50,000 in the month. Today's report
will likely have a limited effect on expectations ahead of
tomorrow's payroll employment report for February 2011 since the
payroll employment survey was conducted earlier in the month (the
payroll survey is conducted in the week containing the twelfth day of
the month); but, given the drop in claims to a 413,000 level in the
February survey week, along with the surge in the ISM manufacturing
employment index to its highest level in 38 years in the month, bodes
well for employment growth to have accelerated in February. We expect
that a bounce back in construction employment from a weather-depressed
level in January will contribute to private employment rising 175,000
in the month. Hiring at the government level is likely to remain weak,
but this will not prevent a 160,000 gain in overall payroll employment
in February following the 36,000 increase in January.

Source: ActionForex.Com

No comments: