The Labor Department has given us the last bit of data ahead of tomorrow’s unemployment data with the release of the Weekly Jobless Claims. It is a disaster and this will change the “non-Farm Payrolls expectations for Friday (currently around 200,000). The Labor Department reported that the weekly jobless claims came to a whopping 474,000. This is markedly heading the wrong way as Bloomberg was expecting a reading of 410,000. This is the highest reading since last August.
The Labor Department cited spring break layoffs in New York and a new emergency benefits program in Oregon, as well as auto shut-downs from the Japan disaster. There was also said to be a one-time administrative factor that may account for the disappointing jump here. Maybe you can even blame the spate of tornadoes. You can choose whether or not you want to believe that on your own.
The prior reading had unexpectedly risen to 429,000 on a preliminary basis, and that figure was revised to 431,000.
The 4-week average jumped by a sharp 22,250 to 431,250. The army of unemployed measured by the Continuing Jobless Claims rose by 74,000 to 3.733 million.
The Labor Department can make excuses as much as it wants. This is just a huge disappointment. If the unemployment data and non-Farm payrolls data comes out rosy on Friday, you can already hear the accusations mounting that the data is being manipulated.
Another issue is non-Farm Productivity and Unit Labor Costs. This was released today as well but it greatly lags as it is a first quarter number. The productivity figure came in at +1.6% versus a Dow Jones estimate of only +1.0%. First quarter unit labor costs also came in up by +1.0% and that figure was in-line with estimates from Dow Jones.
JON C. OGG