Although jobless claims remain in a range consistent with job growth in the vicinity of this year's monthly average of 136,000, they are trending up and might be hinting at deterioration in labor demand.
It is, of course, too soon to know, but when combined with other data, such as the record decline in the ABC News weekly consumer sentiment survey, increased announcements of layoffs in the mortgage industry, and the economy-impacting strains that have occurred recently in the financial markets, any uptick in jobless claims should be taken more seriously than before.
Hence, the fact that for the week ended Aug. 17 jobless claims were just 2k above the consensus forecast for a reading of 320,000 is not as important as the fact that claims were above 320,000 for a second week, the first such occurrence since April. In addition, the number of people receiving jobless claims increased to 2,572,000 from 2,556,000, the most since the week ended April 13.
Deterioration in high-frequency data, such as initial jobless claims, will provide vital clues as to whether or how much recent events are impacting the economy.
P.S. Will you be there when Cramer makes his next move?
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Tony Crescenzi Blog Reports: Citi Taps Fed for $500 Million 8/22/2007 12:31 PM EDT It's no surprise that a big bank would do so to encourage use of the discount window.
Tony Crescenzi Blog Consumer Confidence Plunges 8/22/2007 10:42 AM EDT ABC News' latest survey has the index making it's largest drop ever.
Tony Crescenzi is the chief bond market strategist at Miller Tabak + Co., LLC, and advises many of the nation's top institutional investors on issues related to the bond market, the economy and other macro-related issues. At the request of the Federal Reserve, Crescenzi is a regular participant in the board's Livingston Survey of economic forecasters. He is also the author of the revised investment classic, The Money Market,
first published in 1978 by Marcia Stigum, and The Strategic Bond Investor. At the time of publication, Crescenzi or Miller Tabak had no positions in the securities mentioned in this column, although holdings can change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Crescenzi also is the founder of Bondtalk.com, a popular Web site covering the bond market and the economy. Crescenzi appreciates your feedback; click here to send him an email.
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