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Initial Jobless Claims expected to come in high

Posted June 4, 2008

Baltimore — (TFN): On June 5, at 8:30 AM, the Labor Department will report Initial Jobless Claims for the week ending 05/31.

For the last reporting period, in the week ended May 24, initial jobless claims had risen by 4,000 to 372,000, from a revised 368,000 the prior week. Analysts expect new claims to come in at 370,000.

We believe that growth in the service sector may result in claims around 350,000 or less.

Yahoo’s economic calender terms explains that initial jobless claims “measure the number of filings for state jobless benefits”. According to Yahoo, this provides a “timely, but often misleading, indicator of the direction of the economy, with increases (decreases) in claims potential signalling slowing (accelerating) job growth. On a week-to-week basis, claims are quite volatile, and many analysts therefore track a four week moving average to get a better sense of the underlying trend. It typically takes a sustained move of at least 30K in claims to signal a meaningful change in job growth.”

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