Econoday Report: Jobless Claims 6, 2005

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2005 U.S. Economic Events & Analysis

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Jobless Claims

Definition
New unemployment claims are compiled weekly to show the number of individuals who filed for unemployment insurance for the first time. An increasing (decreasing) trend suggests a deteriorating (improving) labor market. The four-week moving average of new claims smoothes out weekly volatility. Why Investors Care

Released on 10/6/05 For wk 10/1 2005

New Claims, Level
Actual	390K
Consensus	350K
Consensus Range	330K to 450K

Highlights
First-time jobless claims rose 21,000 to 390,000 in the Oct. 1 week, reflecting an unadjusted 74,000 layoffs from the lingering effects of Katrina and the first effects of Rita. The Labor Department pegs the total effect so far from both hurricanes at an unadjusted 363,000. Note there was a sharp upward revision to the prior week in volatility that can be expected until the effects of the hurricanes wind down.

The four-week average jumped 15,750 to 404,500, the worst level in more than two years.

Continuing claims, posted for the Sept. 24 week, rose sharply, up 118,000 to 2.905 million. Continuing claims have risen 327,000 in the past three weeks as the unemployed move from first time filers to continuing filers.

Bonds firmed in reaction to the data that offer a cold reminder of the trouble in store for tomorrow's employment report.

Market Consensus Before Announcement
New jobless claims dropped 79,000 in the week ended September 24 to 356,000. Labor Department officials believe Katrina-related job losses will lead to upward revisions in claims to previous weeks since many workers filed away from their home base. Job losses due to hurricane Rita will be smaller than those from Katrina, but new jobless claims will once again swell in the next couple of weeks.

Jobless Claims Consensus Forecast for 10/1/05: 350,000 (-6,000)
Range: 330,000 to 450,000

Trends

Weekly series fluctuate more dramatically than monthly series even when the series are adjusted for seasonal variation. The 4-week moving average gives a better perspective on the underlying trend.

Data Source: Haver Analytics

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