Jobless Claims in U.S. Unexpectedly Decrease

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Jobless Claims in U.S. Unexpectedly Decrease - Bloomberg

Claims for U.S. unemployment benefits unexpectedly dropped last week to a four-month low, signaling the job market is being hampered by a lack of hiring rather than more firings.

The number of applications for unemployment insurance payments fell 7,000 in the week ended Aug. 6 to 395,000, the fewest since early April, the Labor Department said today in Washington. Other reports showed the trade gap widened in June to the highest level since October 2008 and consumer confidence dropped last week.

Stocks rebounded after benchmark indexes yesterday sank to the lowest level in 11 months as the decrease in worker dismissals relieved investor concern the recovery was stumbling. Companies like Cisco Systems Inc. (CSCO) are among those seeing little sign of recession even as their customers say they will keep a lid on payrolls.

Claims are “moving in the right direction, we’re coming down gradually,” said Julia Coronado, chief economist for North America at BNP Paribas in New York. “At least we’re still not seeing deterioration yet” in the labor market from volatility in financial markets, she said.

The Standard & Poor’s 500 Index climbed 2.7 percent to 1,151.05 at 11:48 a.m. in New York. Treasury securities fell, pushing the yield on the 10-year note up to 2.25 percent from 2.11 percent late yesterday.

 

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Stocks Rally As Jobless Claims Dip, Europe Turns Around - Forbes

A planned meeting between French and German leaders and a decline in U.S. unemployment claims beneath a critical threshold, perhaps with a dose of selling fatigue from a frenzied week, helped stocks soar Thursday morning.

The Labor Department tallied 395,000 initial jobless claims last week, down from 402,000 the prior week. That figure helped reverse pre-market losses but the real boost to markets came as European stocks turned around for a positive finish on hopes that a meeting between France and Germany next week will produce a more credible plan for combating the sovereign debt crisis. Meanwhile, European regulators are said to be considering a ban on short-selling.