Trade Desk Thoughts - Unemployment Claims
Trade Desk Thoughts - Unemployment Claims
Unemployment Claims (Weekly) Actual 478k, Expected 475k, Previous 497k (Revised from 498k)
Release Explanation: This report provides the number of people claiming new unemployment benefits and the number of people who are continuing to claim unemployment benefits. Both metrics are provided in weekly and in 4-week moving average form. Very important that economic forecasts are based on the labor market. Economic strength builds from the willingness/confidence of firms to hire, without a strong labor market growth is hard to achieve. Over time the Employment Data will affect all economic releases, it does however take time for labor trends to form. A currency will strengthen or weaken in-line with the other releases that the Employment Data impacts, rather than as a knee-jerk reaction to these numbers printing. Economists tend to look more at the 4-week numbers because weekly numbers can be volatile although the market reacts to the headline numbers initially.
Trade Desk Thoughts: In the week ending Oct. 4, the number of people who filed initial claims for unemployment benefits was 478,000, a decrease of 20,000 from last week. The labor department estimated that Hurricanes Gustav and Ike added approximately 17,000 claims to the total. The 4-week moving average of initial claims was 482,500, an increase of 8,250 from the previous week’s revised average of 474,250. The insured unemployment rate was 2.7%, unchanged from the last week. The number of people continuing to claim benefits was 3,659,000, an increase of 56,000 from the preceding week’s revised level of 3,603,000. The 4-week moving average for continuing claims was 3,563,250, an increase of 31,750 from the preceding week.
“The 4 week average for new claims was the highest since October 2001,” said Matthew Carniol, chief currency strategist at TheLFB-forex.com. “Today’s report is just another metric which suggests the economy is either in, or very close to being in, a recession.
Forex Technical Reaction: S&P futures are up just over 2% after IBM’s upbeat outlook. The euro and pound are in a bit of a strengthening trend and the yen is heading lower as risk appetite grows.
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