U.S. Jobless claims rise 32,000 to 637,000
Initial jobless claims rose 32,000 to 637,000 last week in the United States. This helped push continuing claims to another record of 6.56 million, suggesting the unemployment rate will continue to rise at a worrying pace going forward. The best way to describe this report is weak.
Nevertheless, initial claims (1st derivative) have trended down since April and year-on-year comparisons (2nd derivative) have trended down since January. On the whole, this report does not provide any new information because all of the major trends I have noted in past posts are still in place (lower 1st and 2nd derivative numbers, higher overall numbers).
In my view, key to the direction of the employment market is the outcome in the GM bankruptcy. As the dealerships are being cut loose at GM and Chrysler and many employees are set to be idled in the summer, consumer spending is vulnerable. It will be interesting to see the market reaction to this data because the market had been brushing off bad news until last week when the stress tests were announced. Now, bad data is again having a chilling effect as yesterday’s poor retail sales numbers attest.
Unemployment Insurance Weekly Claims Report – U.S. Department of Labor