Initial Unemployment claims back over 500,000, bad.
From the WSJ's Real Time Economics:
Economists and others weigh in on the jump in jobless claims.
– Initial claims climbed to its highest level in the past 9 months. Although new claims are often very volatile during the summer due to seasonal adjustment difficulties, these data still suggest a softer labor market. Although new claims are still much lower than they were a year ago, they are still relatively high and are no longer trending lower. –Steven A. Wood, Insight Economics
–The rise in initial jobless claims over the past three weeks makes it difficult to maintain confidence in the recovery and suggests the labor market is backtracking more than we first expected. This latest rise may pressure the Federal Reserve to put its contingency plan into motion. –Ryan Sweet, Moody’s Economy.com
–Today’s report is not only significant because the number of claims are headed in the wrong direction, but the impact of reaching 500,000 from the perspective of market psychology is a clear negative. There’s still too much of a rotating door in the jobs market, with the impact of those employers who are hiring being muted by those who continue to shed jobs…For job-seekers, this is another blow to their confidence. For investors, it’s another unfortunate sign that the economic recovery continues to weaken, a factor likely to contribute to further market volatility. –Jim Baird, Plante Moran Financial Advisors
–While the figure is clearly disconcerting, one reading does not make a trend, and we prefer to wait and see further evidence before suggesting that labor demand has indeed deteriorated sharply. In any case, given that today’s figure is for the payroll survey week, there may be some downward revisions to the August payroll estimates. –RBS Securities
–Federal programs picking back up. With the extension of the EUC program people resumed eligibility in the program and claims continued to pick up. Those collecting state continuing claims and federal (EUC and extended benefits) claims jumped to 10.1M from 9.9M in the July 24th week. –Jill Brown, Credit Suisse