Initial jobless claims destroy expectations

Initial Jobless claims report

Initial jobless claims totaled 262,000 last week, easily destroying analysts expectations of 275,000.

Jobless claims were also down from the prior week when they reached 269,000.

Beating expectations is a good sign that the labor market is maintaining its strength, despite economic uncertainty on a global scale.

This is the lowest weekly total since November.

“Net, net, the labor markets continue to outperform and like the Fed meeting minutes yesterday we believe the strong payroll jobs figures better describe the underlying strength of current economic conditions than does the paltry 0.7% real GDP figure in Q4 2015,” Chris Rupkey at MUFG said.

He added: “The economy is better than the markets think, and the low level of jobless claims means what happens overseas stays overseas. America is immune to the worldwide slowdown in growth, and its economy is ignoring the flashing warning signals from the financial markets.”

Analysts say it’s still too early to draw any definitive conclusions,

Ian Shepherdson at Pantheon Macro shared a chart that shows this week’s drop in the claims and the flattening four-week trend.

claims

A Labor Department analyst said there were no special factors influencing last week’s claims data and that claims were estimated for Pennsylvania, Virginia and Puerto Rico. Pennsylvania experienced a computer glitch and Virginia was unable to provide data on time, though the issues were considered minor.

Some 2.27 million people collected weekly unemployment benefits, known as continuing claims, in the seven days ended February 6. That was up 30,000 from the prior week.