Thursday, May 10, 2007

Initial Unemployment Claims Surprisingly Drop

Initial unemployment claims unexpectedly fell by 9k to 297k (consensus 315k). Initial claims have now fallen for 4 weeks in a row, for a cumulative decline of 46k. The four week moving average declined by over 10k, to 317k. Continuing claims increased by 65k, about 2/3rds of the 98k drop from the prior week, but the longer term trend continues to rise.

Initial claims below 300k indicate a strong labor market, but rising continuing claims belies some of this strength, and perhaps reinforces the skills shortage problem evident in many industries.

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