Economists surveyed by Bloomberg News had expected jobless claims to fall to 550,000. Meanwhile, the four-week moving average for initial jobless claims increased 8,500 to 565,000.
Economists view the four-week average as a better indicator of unemployment conditions, as it smooths-out anomalies for strikes, holidays, or other idiosyncratic events.
A bullish trend for stocks?
Further, the U.S stock market Thursday will likely to ignore the initial jobless claims statistic and focus on the more-bullish continuing claims decline.
Economists and stock traders monitor the continuing claims statistic because it provides a snapshot of how long it's going to take the typical person to find comparable employment once he/she has sustained a job loss. In general, continuing claims above 3 million reflect a slack labor market, and point to extended 6-9 month (or longer) job searches. Hence, any sustained downward trek in continuing claims would be interpreted by the equity markets as bullish.
Still, the above is not to diminish the enormous employment task ahead for the U.S. economy. The nation's deepest and longest recession in more than 25 years has created a troubling job market, according to the Economic Policy Institute, a liberal think tank based in Washington, D.C. Since the recession's start in December 2007, job openings have dropped by 1.8 million, a decline of 42 percent, while the number of unemployed increased by 7.2 million to 14.7 million jobless adults. As a result, there are now 5.8 job seekers for every available job, the EPI said.
Economic Analysis: As the U.S. stock market undoubtedly will Thursday, we're going to ignore the modest uptick in initial jobless claims and focus on the decline in continuing claims. So long as the latter continues to trend lower, that's consistent with a economy that's beginning to see an upturn in demand, which points to an eventual net expansion of the workforce.
